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STI Hibernates Ahead Of Year End Festivals
Singapore Market Commentary | 22 December 2017
By: Jimmy Ng
Articles (49) Profile

As widely expected, the Federal Reserve raised benchmark federal-funds rate by a quarter percentage point to between 1.25 percent and 1.5 percent in December FOMC meeting before Yellen stepped down as Fed chairwoman. This marked the US central bank’s third rate hike this year, and hinted another three rate increases in 2018.

Dow Jones Industrial Average (DJIA) made its last attempt this year to hit the roof by recording a historical high of 24,792.20 on 18 December, driven by optimism that the Republicans can garner sufficient votes for the tax overhaul. The bill was eventually passed by the Senate on Wednesday which would cut corporate rate from 35 percent to 21 percent and temporarily lower individual rates, bringing an early Christmas present to Trump’s administrators. DJIA gained 2.4 percent for the fortnight to end at 24,782.29.

In Asia, Nikkei 225 Index drifted sideways over the last two weeks inching up 0.4 percent at 22,902.76. Hang Seng Index gained 3.3 percent staging a recovery of last month’s correction to close at 29,578.01 while Shanghai Composite Index climbed 0.2 percent to finish at 3,297.06.

Singapore’s retail sales in October dipped 0.1 percent year-on-year according to data released from the Singapore Department of Statistics, falling for the second consecutive month after a revised 0.6 percent decline in the previous month. Non-oil domestic exports rose 9.1 percent in November easing from the 20.5 percent growth in October owing to the high base effects. Nonetheless, exports continued to record growth which also beat economist estimates of a 5.5 percent expansion.

According to market updates provided by the Singapore Exchange, equities barometer Straits Times Index (STI) delivered a stellar 17.5 percent year-to-date (YTD) return, or 505 points above the 2016 year end level at 2881. This is the strongest jump since the 19.7 percent gain in 2012. Looking at the performances of each respective sector, FTSE ST Maritime topped the chart with a 69.5 percent YTD advancement whereas FTSE ST Basic Material turned out to be the biggest underperformer registering a 30.5 percent decline. Last fortnight, STI slid 1.1 percent to close at 3,385.71.

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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