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4 Key Market Events You Must Know In 2015
Featured, Perspective | 14 January 2015
By: Peter Ng
Articles (81) Profile
By: Tan Jia Hui
Articles (82) Profile

1. Sanction Tension in Russia

Following the annexation of Crimea, Ukraine in 2014, a series of sanctions was imposed on Russia by a few of the world’s largest economies which include the European Union (EU) and the US. In response, the Russian government signed a decree in August 2014 which mandated bans mainly on agricultural imports from these countries. As a result the countries involved, are suffering from ongoing economic losses where agricultural exports from the EU to Russia amounted to over EUR10 billion.  On the opposite spectrum of a win-win situation, sanctions have to be lifted some point in time or the near future before economic losses balloon even further.

2. EU’s Greasy Handshake

Gone were the days when the EU would magnanimously hand out cheques to Greece despite woes of a default by the country has resurfaced. While the EU maintains a firm stance to hold the pillars together for the union, however, threats of an opposition party winning the upcoming elections in Greece with an agenda to write-off a portion of its debt, has weakened convictions of the EU to prevent another exit from Greece. Furthermore, as time gets closer to the European Central Bank’s scheduled attempt to perform quantitative easing (QE), neither a default on Greece’s debt or un-democratically excluding Greece from the QE programme is viable. Furthermore, since the debt amount owed to the EU has shrank significantly since the wake of the Greece crisis in 2010, what is left on the table could well be a golden handshake without compensations.

3. New Oil Order for How Long

Oil prices have fallen more than 50 percent to less than US$50 per barrel over a course of less than one year amid a supply glut, where analysts at Goldman Sachs coined this as the new oil order. The excessive supply situation was exacerbated as members of the Organization of the Petroleum Exporting Countries (OPEC) refused to cut back on productions in order to maintain their market share. The adamant stance of OPEC has broken the equilibrium of the balance of payment accounts for member countries where none of the countries in OPEC is able to balance their budgets. The question is, how much longer can this battle of endurance last?

4. Farewell to “0”

As the saying goes, “All good things must come to an end.”  The world awaits to bid farewell to a six-year long “near to zero” interest rate policy, which was first piloted by the US Federal Reserve to bolster economic activities on the brink of the US subprime crisis in 2008. Although without a definite timeline, this impending event is expected to debut in 2H15, and could just be one of the most important events to watch as it impacts investment returns in light of higher borrowing costs, and ultimately a shift in asset allocation. Volatility can be expected in the markets as investors adjust to a new norm. After all, this may not be bad news as a rate hike could make the money in our bank accounts work harder for us.

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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