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New Year Kicks Off With A Bang
Singapore Market Commentary | 05 January 2018
By: Jimmy Ng
Articles (28) Profile

The US markets kicked off 2018 on a positive note with major indices rallying to record levels fueled by energy and technology stocks. Dow Jones Industrial Average broke 25,000 hitting an all-time high of 25,075.13 on 4 January. Over the fortnight, the US bellwether jumped 1.2 percent while S&P 500 and Nasdaq also reached milestones of their own gaining 1.5 percent and 1.6 percent respectively. Meanwhile, minutes from December Fed meeting revealed a distinct lack of unity over the central bank’s projection of rate hikes this year.

Oil prices rallied on the back of continuing civil unrest in Iran, alongside Opec-led agreement on production curbs that will extend throughout 2018 to end the three-year-old over-supply situation. Brent crude oil rose above US$67 a barrel during Tuesday’s trading session touching an intraday high of US$67.29. US dollar, on the other hand, remained under pressure on rising commodity prices and falling bond yields.

Asian markets grew from strength to strength as various benchmarks broke critical resistances. Hang Seng Index soared 2 percent to hurdle past the 30,000-mark on 2 January led by China property developers’ strength after news that China may defer implementation of property tax until 2020. Likewise, Nikkei surged over 3.2 percent to 23,506.33 in its first session of 2018 on 4 January, tracking the stellar gains in other markets.

Singapore’s gross domestic product grew 3.1 percent in 4Q17 driven largely by the manufacturing sector, according to data from the Ministry of Trade and Industry. Although the growth eased slightly from 5.4 percent recorded last quarter, it pushed full-year expansion to 3.5 percent which was at the upper end of the government’s revised forecast. Purchasing Manager’s Index for December 2017 came in at 52.8 marking the 16th month of consecutive expansion.

On the local bourse, Venture Corporation is set to be included in the Straits Times Index (STI) with effect from 5 January, replacing Global Logistic Properties following its privatization. STI added 3.1 percent ending at 3,489.45 over the last two weeks.

A key event which fellow Singaporeans would be keen to lookout for next month would be the delivery of Singapore’s 2018 Budget Statement in Parliament on 19 February.

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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