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Straits Times 3,169.89 +9.17 +0.29%
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Dow Jones 25,585.69 +95.22 +0.37%
Shanghai Composite 2,852.99 +0.48 +0.02%
Upward Momentum Going Strong
Singapore Market Commentary | 27 October 2017
By: Jimmy Ng
Articles (49) Profile

US benchmark Dow Jones Industrial Average (DJIA) pushed through 23,000 driven by strong earnings from tech giants including Amazon, Alphabet, Microsoft and Intel. Early this week President Trump mentioned that he was very close to naming the next Fed chair while the Senate has also approved Republican’s budget bill signifying a major step forward in their tax cut plans. These series of positive news proved very helpful in sustaining the uplift sentiments, as DJIA ended the fortnight gaining 2.5 percent at 23,400.86.

Volatility heightened in the Euro zone, with ECB President Mario Draghi unveiling plans to cut the central bank’s bond purchases from 60 billion euros to 30 billion a month starting in January, but also extending the purchases until September next year. Meanwhile, tensions centering Catalonia’s declaration of independence from Spain will continue to be a cause for concern.

In Asia, China’s 19th national congress, the country’s most important political event held once every five years, concluded this week seeing party chief Xi Jinping consolidating his power with his name inserted into the party’s constitution. Economy wise, China will continue its growth at a moderate to high pace, while deepening its market-oriented reform of its financial system. Shanghai Composite Index rose 0.8 percent to close at 3,416.81 while Hong Kong’s Hang Seng Index lost 0.1 percent falling to 28,438.85.

On local shores, Singapore’s economy beat expectations by growing 4.6 percent in 3Q17, according to advance estimates of gross domestic product growth by the Ministry of Trade and Industry. This came in higher than the 2.9 percent growth achieved in the corresponding quarter year-on-year (y-o-y). Nevertheless, inflation in September remained flat with headline Consumer Price Index standing at 0.4 percent unchanged from the previous month.

Local bourse saw a healthy rally breaking the 3,354 previous high set in July this year, underpinned by better-than-expected results delivered by the local banks. Oversea-Chinese Banking Corporation reported a 12 percent y-o-y quarter earnings growth with nine-month net profit rising 16 percent to $3.1 billion. Meanwhile, United Overseas Bank and DBS Group are slated to release their results on 3 November and 6 November respectively. Straits Times Index added 2 percent to close at 3,386.44 over the last two weeks.

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.

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