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Rate Hike Still Expected This Year, STI To Trade In Tight Range
Singapore Market Commentary | 25 September 2015
By: Louis Kent Lee
Articles (199) Profile

In the move that caught most off guard, Fed Chairwoman Janet Yellen delayed the muchly anticipated rate hike in September.

Although most were starting to question the authenticity of Yellen’s intent of a rate hike, if any at all, in a speech after markets closed on 24th September, Yellen said that the Fed was on track to raise interest rates in 2015, but acknowledged that any surprises from the economy could still cause the central bank to change course.

However, in the US, we saw industrial heavyweight; Caterpillar, announce cuts of 10,000 jobs and 20 facilities by 2018 in response to the energy and mining downturn.

Despite the anticipated rate hike in the US later this year, Singapore shares are still expected to trade in a tight range.

From a charting perspective, the Straits Times Index (STI) is expected to continue trading in its small triangle formation bounded topside resistance at 2,895 and immediate support at 2,825.

On a company’s perspective, we are seeing construction companies keeping their eyes opened despite the thick haze treading in “very unhealthy range” as they struggle to cope with contractual obligations in Singapore.

Alternatively, sectors that could be a possible direct beneficiary of the haze includes medical-related stocks and healthcare companies. These may include companies like Medtecs, Raffles Medical, Parkway Life REIT and IHH Healthcare.

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

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