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Almost A Miss For The STI
By: Peter Ng
Articles (81) Profile

According to the International Monetary Fund (IMF), global economic activity is expected to emerge stronger in 2H14 and accelerate in 2015. However, momentum for economic activities could be weaker than expected as investments and growth remained in a subdued state.

Commenting further, the IMF deemed the recent rebound of the US economy from its disappointing 1Q14 performance to be sensible.

This was seen as growth at US factories in June held at near the fastest pace of the year where the Institute for Supply Management’s factory index came in at 55.3. The positive results were on the back of higher demand for automobiles and construction materials, as well as elevated overall consumer and business sentiments that helped to lift order books of US manufacturers.

The positive economic climate did not end in the US, as China’s manufacturing output in June expanded at the fastest pace this year, according to the Purchasing Manager’s Index reported by the country (June: 51, May: 50.8). This further signified that the Chinese government’s efforts have helped to stabilise its economy, resisting a slowdown in the world’s second largest economy.

Despite the cheers from abroad, the positive consensus did not resonate back home. For the year ended 31 March 2014, Singapore’s sovereign wealth fund, Temasek Holdings reported a lacklustre total shareholder return (TSR) of 1.5%, which pales compared to a 3-year and 5-year TSR of 3.9% and 10.9% respectively. This was mainly attributable to weakness in the Singapore and China markets where a significant proportion of Temasek’s assets are located.

The Straits Times Index was almost flat for the past two weeks until 11 Jul, when the index registered 24.23 points gain in a single day and closed at 3293.73.

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.

Please click here for more information about this author.


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