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Straits Times 3,234.12 -8.75 -0.27%
Hang Seng 27,323.59 -429.34 -1.55%
Dow Jones 25,098.53 -201.39 -0.80%
Shanghai Composite 2,723.26 -57.71 -2.08%
Oversold Markets Climb Out Of Epic Decline
By: Jimmy Ng
Articles (36) Profile

US stocks rallied as investors’ attention was diverted to stronger corporate earnings away from the shadow of the trade wars. Alphabet stock soared to record highs rising 3.5 percent on 24 July 2018 as Google earnings beat estimates. Unfortunately, shareholders of Facebook were not so lucky. The social media giant lost more than US$100 billion of its market cap as its share price plunged by more than 20 percent in the after-hours session on 25 July following a weak guidance.

Trade tensions between US and Europe may ease after President Trump and EU chief Juncker agreed to work together to lower trade barriers. Meanwhile, the US administration has promised US$12 billion of aid plans aimed at helping farmers affected by the trade wars. China has also put in place policies designed to help small and medium-sized enterprises (SMEs) navigate through the trade storm including lowering their interest costs and taking in some SME loans as collateral for the Medium Lending Facility. Furthermore, targeted cuts in the reserve requirement ratio are also expected to cushion the impacts of a potential economic slowdown.

Over the last two week, Dow Jones Industrial Average advanced 2.4 percent to 25,527.07, while Hang Seng Index and Shanghai Composite Index climbed 1 percent and 1.5 percent respectively.

On the local bourse, developer Wheelock Properties received an offer by its Hong Kong-listed parent Wheelock and Company through unit Star Attraction, to be taken private. At $2.10, the offer price marked a 20.7 percent premium over the group’s last traded price of $1.74 on 13 July before the announcement, but 21.6 percent below its net asset value of $2.68. The acquisition also gave a lift to other similar mid-cap developers in the depressed real estate sector burdened by the recent cooling measures. Straits Times Index rose 2 percent to finish at 3,324.98.

While Federal Reserve has previously signaled two more interest rate increases this year back in June, Trump’s recent concerns on the rising dollar has added some uncertainties to the pace of rate hikes. Hence, how things may turn out in the upcoming FOMC meetings next week would be interesting to look at.

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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