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Straits Times 3,116.17 -8.28 -0.27%
Hang Seng 26,503.93 -17.92 -0.07%
Dow Jones 27,024.80 +237.44 +0.89%
Shanghai Composite 2,991.05 -16.84 -0.56%
Asian Markets Continue Ascension Despite Grexit Woes
By: Peter Ng
Articles (81) Profile

The Asian markets continued its rally as the Hang Seng index (HSI) broke past the 28,000-mark, which was the first time in 7 years since 2008 before the wake of the global financial crisis (GFC).

The bullish sentiment was fuelled by a record level of Southbound trading volume from China amid the loosening of rules, enabling domestic mutual funds to trade securities in Hong Kong via the Shanghai-Hong Kong Stock Connect scheme.

While the index level was on par with levels before the GFC, on the other hand, valuations remained in check. As at 22 Apr-15, the price-earnings ratio was 11.9 times compared to 24.3 in Oct-07, suggesting further room for run-ups.

The bulls did not charge into the Western hemisphere, as the European markets braced themselves in fear of Greece exiting the European Union (EU).

Greece is on the brink of default where the nation is not only short of monies in its coffers, but is also merely weeks away from the deadline of meeting its debt obligations to the International Monetary Fund that is due by 11 May-15.

Meanwhile, Greece continues to negotiate with creditors in the EU for a bailout loan of EUR7.2b.

However, an agreement has yet to be reached as both sides took a different stance. Greece is seeking for looser austerity measures, while the EU requires reforms to be made before a bailout loan will be granted to Greece.

Back in local grounds, the Straits Times index traded range-bound around the 3,500 mark, as we enter the earnings seasons with real investment trusts showing their score cards first.

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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