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Singapore’s Slowest Growth Since 2009 At A Mere 2%
Singapore Market Commentary | 26 February 2016
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By: Xiu Kai Sua
Articles (10) Profile

Now that the celebrations for Lunar New Year have ended, we once again see the markets being plagued by negative news.

At home, the Ministry of Trade and Industry announced that for 4Q15, the Singapore economy grew at a slightly slower-than-expected 1.8 percent. This came under the initial estimate of 2 percent growth, and brought 2015 full-year growth to 2 percent, the weakest annual growth since 2009 when the economy was hit by the global financial crisis.

The drop came in light of services sector expanding at a slower pace than expectation and the manufacturing sector contracting more than anticipated, by 6.7 percent in 4Q15 as compared to the official estimate of 6 percent made in January.

We also see oil prices remaining weak and even more volatile than before, despite a short rally and falling back more than 4 percent to US$31.92 a barrel on 23rd February, continuing the onslaught on the already heavily battered oil and gas industry, as we can see from STI oil & gas hot favorite Sembcorp Marine which announced a $290 million net loss for FY15.

Other than oil prices, commodity prices as a whole saw no signs of recovery in terms of stability and outlook, further punishing companies that has any relations to anything that is grown, dug, or pumped out of the ground. The heavily bruised Noble Group, who has garnered much attention in recent times regarding their questionable accounting policies, was once again back into the spot light as they posted a US$1.67 billion net loss for FY15 on Thursday, due to a US$1.2 billion impairment hit, on top of losses recognized from the recent sale of joint venture Noble Agri.

With other news of global uncertainties such as China’s economy slowdown, threat of another currency valuation, as well as the U.S.’ slow recovery making headlines week in week out, it is of no surprise that investors remain skeptical of future growth and market confidence staying bleak.

Armed with a Bachelor in Economics and Finance, Xiu Kai keeps a watchful eye on the markets and conducts due diligence on selected stocks through a tested and proven value investing model.

Please click here for more information about this author.

Sembcorp Marine  1.460 +0.020 +1.39%   
Business: Co is a leading global marine & offshore engineering group. [FY18 Turnover] rigs & floaters, repairs & upgrades, offshore platforms (98.8%), ship chartering (1%), others activities (0.2%).

Insight: May-19, 1Q19 revenue fell 31.3% to $810.6m due to ... Read More

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