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Company Earnings Eyed As STI Starts The Week Negatively
Forward, Tradeable | 20 January 2014
By: Justin Harper
Articles (23) Profile
By: Simeon Ang
Articles (125) Profile

While the week ahead may not be the busiest for the world economy, there are a still some key events that traders will watch out for.

And in Singapore the earnings season is in full swing with some big names reporting Q3 or Q4 results. Given all the talk of Singapore facing asset bubbles and fear of a property crash, some solid earnings from our big blue chips would help settle a few nerves.

China just announced that its economy grew 7.7 percent in 4Q13, the lowest level seen since 1999. However, the headline figure was still above expectations of 7.6 percent growth.

Despite this, the broader Straits Times Index continues to languish in negative territory in morning trade with most sub-indices underperforming.

Read on to find out more of what’s in store for the trading week ahead!

What to Look Out for in the Next 7 Days…

In Singapore…

  • December Consumer Prices Index (CPI)
  • Manufacturing production for December

While most of the focus will be on the likes of Keppel, Fraser and CapitaMalls who will be posting quarterly earnings results, there is some economic data that shouldn’t be forgotten.

The first is December’s CPI, otherwise known as inflation figures, released on Thursday. In November, inflation crept up to 2.6 percent, rising from October’s 2 percent reading. This was attributed to rises in accommodation and transport, which make up more than 40 percent of the basket of goods measured.

Manufacturing output will be published on Friday for December although we already know the GDP figure for 2013 came in at a better-than-expected 3.7 percent.

Manufacturing plays a big part of Singapore’s growth story. There were a few concerns towards the end of the year as factory output started to slide. November saw a fall in output as it grew just 4 percent, compared to 8.3 percent for October.

The electronics sector has continued to provide the necessary spark to keep output healthy.

Around the World…
In the China, look out for,

  • Flash manufacturing PMI (HSBC/Markit) for January

This will be the first data out of China this year focusing on its all-important factory output, which drives the Chinese economy. Many believe the Chinese economy is in recovery mode so the flash data will be eagerly anticipated to see if this will continue in 2014.

December’s PMI print came in at 50.5, slightly lower than the 50.8 recorded the previous month. But it was still above 50 which signifies expansion mode. The health of the Chinese economy is crucial for the fortunes of the region.

US:

  • January PMI manufacturing data

It’s a relatively quiet week in the world’s biggest economy, save for factory output data due out on Thursday. The US economy ended 2013 on a high with factory output hitting its highest level in 11 months in December.

The reading of 55 was a slight, but welcome, increase on November’s 54.7 print. The hopes are that momentum is growing in the US towards a full and sustained recovery and these manufacturing figures add fuel to that argument.

Scroll down to our Calendar below to find out more about the exact dates of these figures release as well as other important economic data.

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This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.


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The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

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