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US Markets Push New Highs; STI Holds Support
Singapore Market Commentary | 19 September 2014
By: Peter Ng
Articles (81) Profile

Amid the lacklustre inflation data tracked by the movement in the US consumer price index, as the index registered a growth of 1.7% in the 12 months to August compared to 2 percent when measured till July, has led the US Federal Reserve to hold the country’s interest rate at the 0-0.25% range.

The chairwoman of the US Fed, Janet Yellen, has reiterated the US Fed’s commitment of rooting a low interest rate environment as the US economy remains in a state where it requires unconventional support, raising expectations that an interest rate hike would only occur in 1H15.

Following the announcement, the US markets cheered as the Dow Jones Industrial Average pranced into a new record high and closed at 17,275.37 points on 18 September.

Meanwhile, China’s outbound investment data gained 112.1% y-o-y, as opposed to inbound investments, in terms of foreign direct investments, into the world’s second largest economy which registered a new multi-year low (14% contraction y-o-y). This was mainly in tandem with China’s stance of pushing domestic Chinese companies to seek acquisitions abroad in order to gain market access and international exposure.

Back home, Singapore has cleared Rmb21 trillion for the first 8 months in 2014 as the Lion City remains as the second-largest international offshore yuan hub after Hong Kong. The encouraging data has pushed Industrial Commercial Bank of China to call for more banking products to accommodate the growth for yuan financial services.

The Straits Times Index fell and closed at 3,272.62 points before the US Fed announcement on 16 September, where the index has subsequently rebounded back to its current support level at 3,300 points.

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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