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Slower Growth And Weak Data From China Puts Dampener On Markets
Review, Tradeable | 14 March 2014
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By: Brian Brinker
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By: Louis Kent Lee
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Despite the better than expected data that came in from the US, where we saw US retail sales figures beating estimates, and weekly jobless claims falling to their lowest levels in four months, weak data that came out from China, has effectively weighed in on gains we’ve seen in the markets.

Retail sales data from China disappointed, as it reflected only 11.8 percent, which failed to beat estimates of 13.5 percent. Urban investment data also showed a fall from 19.6 percent, to 17.9 percent, while China industrial output also rose at a slower pace of some 8.6 percent, compared to estimates of 9.5 percent.

The STI was seen swimming in the red alongside other Asian indices since the opening bell.

Notable component stocks smeared in red were CapitaLand, City Development, and SingTel.

Read on to find out what happened over the week!

Source: Factset

Singapore Market Commentary
In Singapore…

Yuan Deposits Up 70% In Last Nine Months of 2013 (12/03)
The Singaporean government has made it clear that it wants to position the city-state as one of the world’s leading hubs for yuan trading. So far, it appears that the country’s efforts are paying off, with yuan deposits jumping by some 70 percent in the last nine months of 2013.

The Monetary Authority of Singapore has stated that deposits hit $32.65 billion dollars at the close of the year. Growth is being propelled by global MNC’s that have operations in China and are looking for offshore centers to store some of their money.

While Singapore is making a lot of headway, Hong Kong remains far and ahead as the world’s leading center for yuan trading. With the U.S. dollar declining, however, the yuan could be set for a period of strong growth. If so, Singapore may be able to ride this growth and expand its market share.

Confidence in Singapore’s Banks On the Rise(13/03)
Financial services firms around the world have drawn weary eyes in the last few years. A turbulent global economy and the fallout of the 2008 financial crisis have caused many to view banks with caution, if not outright suspicion. Confidence in Singapore’s banks, however, has been improving in recent months.

26 percent of people polled in Singapore reported that their confidence in banks increased over the last year, while only 12 percent said confidence fell. This compares to 2012 when 40 percent of the people polled reported that their confidence in banks fell.

Also, respondents noted that they still prefer traditional banks, and 1 out of 2 respondents said they would change banks if they were unhappy with the services provided.

Singapore To Be One Of the World’s Most Active Hiring Markets in 2014 (13/03)
According to a study conducted by Robert Half Singapore, the city-state is positioned for strong job market growth in 2014. The financial sector should enjoy especially strong gains, with 45 percent of financial and accounting firms expecting to add staff this year. In fact, only 2 percent of financial companies said that they plan to freeze their headcount.

Around the World…

Malaysian Industrial Output Up In January (11/03)
The Malaysian Industrial Production Index grew by a solid 3.7 percent in January, but failed to meet estimates. Most of the growth was seen in the manufacturing sector, which recorded growth of 4.7 percent. Other sectors, such as mining and electricity were more stagnant, showing growth of only 1.5 percent and 0.2 percent, respectively.

In the manufacturing sub-sector, strong growth was propelled by electronics, which recorded a 13.3 percent expansion. Petroleum, chemicals, rubbers, and plastic products also recorded a solid growth of 6.7 percent, while transportation equipment grew by 4.7 percent.

Markets Around the World Rattled By Weak Chinese Economy (13/03)
The on-going political crisis in Russia and the missing Malaysian airplane have been eating up all of the headlines in recent days. Still, traders have been more concerned with the weak economic data coming out of China, and markets across the globe have been sinking lower as a result.

The Chinese government recently released a wide range of data concerning retail, manufacturing, housing, investment, and other key areas. Unfortunately, the vast majority of the data showed weakness. Some are now questioning whether or not China will be able to reach its growth target of 7.5 percent this year.

Industrial output rose by only 8.6 percent, the lowest reading since 2009. Fixed-asset investment slowed to 17.9 percent YOY, the weakest reading since 2002. Meanwhile, retail sales grew by only 11.9 percent, the slowest growth since 2011. Housing and other sectors also remain weak.

Frictions Between China and U.S. Intense But Optimism Remains (12/03)
Premier Li Keqiang has acknowledged that tensions between the United States and China remain tense, but has stated that as long as both countries focus on what they have in common, and not their differences, progress can be made.

The world’s two largest economies have been strained by economic and military relations. China’s tensions with its neighbors over the South China Seas are felt in the U.S.. China’s increasingly assertive tone has also irked leaders in Washington and drawn criticism from across the world.

Li Keqiang also noted that tensions remain high between China and the various nations of South East Asia. He noted that China would protect its sovereignty, but that pursuing peaceful measures would remain a priority.

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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.

CapitaLand  3.570 +0.01 +0.28%   
Business: Co develops, owns, and manages real estate properties. [FY18 Geographical] China (41.2%), S'pore (38.5%), Europe & others (18.6%), Vietnam & Others (1.7%).

Insight: Apr-19, 1Q19 revenue fell 23.8% while net profit d... Read More
City Developments  10.280 +0.40 +4.05%   
Business: Co is an international property & hotel conglomerate. [FY18 Turnover] Property development (48.4%), hotel operations (39.8%), rental properties (8.5%), others (3.3%).

Insight: May-19, 1Q19 decreased 29.5% to $746.2m compared t... Read More
Singtel  3.140 -0.03 -0.95%   
Business: Asia's leading communications group. [FY19 Turnover] Mobile Comm (31.1%), Data & Internet (19.2%), Infocomm Technology (17.5%), Sale of Eqmt (16.5%), Digital Biz (7.2%), Fixed Voice (5.2%), Pay-TV (2.1%), Leasing (0.8%), others (0.4%).

Insight: May-19, FY19 operating revenue remained flat at $1... Read More

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