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US-North Korea Tensions Bruise STI
By: Jimmy Ng
Articles (50) Profile

Wall Street took a beating last week amidst escalating geopolitical tensions between Washington and Pyongyang, which saw the Dow Jones Industrial Average (DJIA) plunging 204.69 points within a single day on 10 August. The conflict, however, turned a knob lower this week when the isolated nation decided not to proceed with its threatened attack on Guam. Coupled with the dovish FOMC minutes, the US bellwether reclaimed its 22,000 territory on 16 August. Nevertheless, investors were shaken following a terror attack in Spain on 17 August and DJIA lost 1.3 percent over the fortnight to close at 21,750.73.

China’s July trade data came in weaker than expected. While overall trade of the world’s second-largest economy continued to grow, the rate was the slowest this year. Export growth slowed to 7.2 percent from 11.3 percent quarter-on-quarter, while import growth at 11 percent slid from the 17.2 percent expansion in June. Shanghai Composite Index edged up 0.2 percent to close at 3,268.72. Negative sentiments worldwide spilled to Hong Kong prompting the Hang Seng Index to fall 1.9 percent ending at 27,047.57.

At home, Singapore’s gross domestic product (GDP) grew by 2.9 percent in the second quarter of 2017, beating 1Q17’s numbers of 2.5 percent growth year-on-year. This meant that the local economy grew 2.7 percent for the first half of 2017. Taking the better-than-estimated data into consideration, Ministry of Trade and Industry announced on 11 August that it has narrowed full year growth forecast for the Singapore economy to two to three percent from the earlier range of one to three percent. Meanwhile, non-oil domestic exports growth rose 8.5 percent in July extending the 8.8 percent growth last month.

Despite the upbeat economic data, Singapore’s Straits Times Index (STI) dived below 3,300 amidst impacts from global markets’ pull-backs and heavy profit taking. The local bourse is also plagued by Ezion Holdings’ request for a temporary trading suspension of its shares while it seeks discussion with stakeholders about financing options. This came along the offshore logistics group’s depressing 2Q17 results reporting a net loss of US$2.6 million. Over the last fortnight, STI sank 2.2 percent to finish at 3,251.99.

With the curtains drawn and 2Q17 results season almost coming to an end, investors now turn to the upcoming Jackson Hole Symposium in late August to look out for key decisions of major central banks.

Equipped with a Bachelor in Mechanical Engineering and a few years of experience in the finance industry, Jimmy hopes to help investors gain deeper insights and make well-informed decisions by sharing his perspective.

Please click here for more information about this author.

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