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STI Stands Resilient Despite Unsettling Global Economic Data
Singapore Market Commentary | 21 February 2014
By: Peter Ng
Articles (81) Profile

In the US, jobless claims for the week ended 15 Feb dropped by 3,000 to 336,000. Although the data was lower than median estimates, this slowdown in employee dismissal could signal for a pickup in hiring, boosting consumer spending moving forward.

According to China HSBC Purchasing Managers’ Index, manufacturing activity fell to a 7-month low at 48.3 point in Feb, which could be largely attributed to the Chinese New Year holidays. The negativity has fueled speculation that the Chinese government would loosen monetary policy in order to keep the economy growing at 7.5% in 2014.

The discomfort did not end in Asia as Japan registered a record trade deficit of JPY11.5t in 2013, coupled with pummeling consumer confidence and a potential sales-tax hike in Apr, undermining Abenomics’ attempts for a sustained economic recovery.

Singapore’s gross domestic product grew 4.1% in 2013, shooting past estimates from the market and government. The STI received a boost from generally positive earnings results of the index’s constituent companies as well as announcement of GST vouchers and the Pioneer Generation Package from Singapore’s Budget 2014, allowing the index to close above the 20 and 50-day moving average, setting the stage for further upside potential.

All eyes are set upon a G-20 meeting which is to take place in Sydney over the weekends, as finance leaders hold discussions to synchronise monetary policies between the US and emerging markets in respect to the wind-down of the US Fed stimulus.

Backed by a strong interest in investments, Peter's research spans across a range of industries, with his focus placed on companies listed on the SGX.

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