Tuesday, 20 October 2015

Singapore, Hong Kong budgets unveil divergent responses to intensifying challenges

Singapore is big on welfare, while Hong Kong is propped up by tax cuts.
Regional powerhouses Singapore and Hong Kong last week unveiled divergent responses to the intensifying challenges of rising income disparity, the need to strengthen the supply side to underpin growth, and aging populations.
According to Fitch Ratings, Singapore is adopting a more explicitly redistributionist fiscal policy while Hong Kong is introducing tax cuts as part of its latest budget round.
The emphasis of Singapore's growth policy seems to be on strengthening total factor productivity, partly through fiscal incentives. These include extending a wage credit scheme and corporate income tax rebates.
Hong Kong's approach is to boost infrastructure expenditure to deepen the capital stock, while letting the supply side take care of itself to a greater degree. The government's long-term fiscal plan calls for capex to rise by a compound annual growth rate of 9.9% from FY15 to FY19.
Fitch's analysis suggests Hong Kong is spending slightly less on identifiable social items as a percentage of GDP than in 2000, whereas in Singapore the percentage is about the same. The share of expenditures on social items in both has been rising in recent years after dipping in the early 2000s.
Nonetheless, the fiscal positions for both cities are likely to remain significant sources of credit strength over the medium term.
Fitch expects that policymakers will continue to place a high priority on long-term fiscal sustainability.
Hong Kong continues to forecast surpluses through to FY20, which means it will accumulate fiscal reserves in nominal terms over the medium term.
In Singapore, the budget plan includes a deficit of SGD6.7bn in FY15, however non-budget sources of revenue will mean that the overall general government balance will remain in surplus.
It is also notable that both governments have a tendency to budget on the conservative side, and have historically outperformed their fiscal plans. In the case of Singapore, the fiscal balance has outperformed the budget for the past 11 consecutive years.

Monday, 5 October 2015

STI MARKET REVIEW- 5th Oct 2015


Singapore’s benchmark Straits Times Index opened today at 2,778.59 points, up by 1.21 per cent or 33.92 points and ended 58.10 points or 2.08% higher to 2851.25. STI came off from its intra-day peak of  2851.25 and  low of  2822.28 Wall Street's unexpected bounce on Friday helped add some stability to Asian markets on Monday, enabling the Straits Times Index (STI) to jump 58.1 points or 2.1 per cent to 2,851.25. Turnover however, remained low and concentrated in the 30 index stocks - the entire market traded just 1.1 billion units worth S$942 million of which S$697 million or 74 per cent was generated by STI components.

LOCAL BOURSE  
                                                                        
Singapore Exchange (SGX) has launched a new index business, SGX Index Edge, that will offer comprehensive services aimed at addressing the rising demand for index-linked investment in Asia.



Market forecast:

STI is expected to be bullish tomorrow. STI has the resistance at 2860. If it breaks this level it is expected to go up till 2875. STI has its support at 2820. The bullish trend is supported by weak U.S. job data  which has eased out the fear of U.S. rate hike by FED.

STI COUNTER SPECIFIC NEWS    


  • Ascendas Reit has kicked off bookbuilding on its much-anticipated Singapore dollar perpetual non-call 5, with guidance offered in the 5 per cent area.
  • OSIM International is down 1.23% at $1.605 after Taiwan's Food and Drug Administration reportedly found excessive levels of pesticide residues in OSIM's majority-owned TWG Tea's "Chamomile Green Tea" that was exported from India.
  • Two senior US-based energy executives have left commodity trader Noble Group in the past week.


GLOBAL FACTORS AND WORLD INDICES:


  • Hong Kong stocks bounced sharply on Wednesday from the previous session's two-year lows, wrapping up a tumultuous quarter in which the benchmark Hang Seng Index plunged more than 20 per cent. At market close, the Hang Seng was up 1.4 per cent, to 20,846.30, while the China Enterprises Index gained 1.9 per cent, to 9,405.50 points.
  • China's stocks rose, paring the biggest quarterly loss since 2008, as the government struggled to halt a US$5 trillion rout and the world's second-largest economy showed signs of a sharper slowdown.
  • European stocks advanced, rebounding from Tuesday's decline, as investors paused to assess value in what is heading for the worst quarter in four years. The Stoxx Europe 600 Index jumped 1.8 per cent to 345.43 at 8:07 am in London.
  • Nikkei The pan-European FTSEurofirst 300 index rose 2.2 per cent. The euro zone's blue-chip Euro STOXX 50 index advanced 2.5 per cent.
  • Hong Kong stocks closed 1.62 per cent up on Monday. The benchmark Hang Seng Index gained 348.41.79 points to end at 21,854.5.

Thursday, 1 October 2015

STI MARKET REVIEW - 1st Oct 2015


STI MARKET REVIEW :

Singapore benchmark Straits Times Index (STI) opened at 2,800.54 points, up 9.65 points or 0.35 per cent, after US stocks gained the previous night and ahead of the release of China's official purchasing managers' index (PMI) data, a manufacturing gauge and ended 11.51 points or 0.41% higher to 2772.36. STI came off from its intra-day peak of 2799.80 and low of 2772.36

Singapore stocks posted gains midday on better-than-expected economic data out of China. China's official Purchasing Managers' Index climbed to 49.8 in September, compared with a median estimate of 49.7 in a Bloomberg poll, as well as an August reading of 49.7.

LOCAL BOURSE

Singapore home prices dropped for an eighth quarter, matching the longest losing streak in 13 years, as tighter mortgage curbs cooled demand in Asia's second-most expensive housing market.
An index tracking private residential prices fell 1.3% in the three months ended Sept. 30 from the previous quarter. The slump was the most since June 2009, in the aftermath of the global financial crisis.



Market forecast:

STI is expected to be positive tomorrow as China’s official Purchasing Managers' Index has come better than expected. STI has the support level of 2778. STI has its resistance at 2828.

STI COUNTER SPECIFIC NEWS

  • Singtel's Thai associate Advanced Info Service Public Company Ltd has submitted for arbitration, on Sept 30, a claim for 70 billion baht (S$2.7 billion) from Thai state-owned telco TOT Public Company Ltd.
  • QT Vascular has successfully defended itself against a patent infringement lawsuit filed by another medical company- AngioScore.
  • ST Engineering CEO will retire next year.
  • Hong Leong Asia expects to post a loss for its third quarter and nine months ended Sept 30.

GLOBAL FACTORS AND WORLD INDICES:

  • European shares rose on Thursday, buoyed by a further rebound for mining and trading company Glencore after a painful sell-off earlier in the week and bid talk for German salt and fertilizer company K+S
  • Malaysian shares closed higher on Thursday, with the Kuala Lumpur Composite Index gaining 12.89 points to 1,633.93. Some 1.52 billion lots, valued at RM 1.82 billion, were traded. Gainers out numbered losers 465 to 306.
  • Australian shares closed higher for a second session on Thursday, continuing to recover from a recent slide to a two-year low with the help of solid gains in the financial sector. The S&P/ASX 200 index put on 1.8 per cent, or 90.5 points, to 5,112.1, pulling further away from a trough of 4,918.4 set on Tuesday. The index has gained nearly 4 per cent in the past two sessions.