Singapore News Highlights: 24th Nov 2015

• Singapore shares were up with the STI up 0.04% or 1.05 points to 2,904.54. 

• KLW shares fall 14% after it announced yesterday that it is under investigation by the Commercial Affairs Department for possible offence(s) under the Securities and Futures Act.

• New Silkroutes Group requested to lift its trading halt, after Malta's Ministry of Energy and Health has become a new shareholder of IEG Malta.

• UOB launched its US$8 billion covered bond programme.

• Noble’s battling criticism of its accounting, may have its credit rating cut to junk by S&P's on concerns about the company's liquidity.

• Kepple Corporation has priced the issue of its S$200 million notes due 2023.

• Subsidiary of Midas won 4 contracts worth S$16.1 million to supply aluminium alloy extrusion for metro trains in China, and airport rail trains in Malaysia.

• Yuan fell to its 3-month low as the central bank weakened the currency's reference rate amid a dollar advance and also due to the concern that China will allow a decline to help its economy.

• Risks for S-Reits will rise in 2016, in view of weak economic fundamentals and new supply that will be added into most sectors.

• Singapore inflation eased last month, to -0.8% as compared with -0.6% in September mainly due to the lower costs of oil-related and retail items.

• The creation of the Asean Economic Community has potentially significant consequences for the Singapore economy.

• USD rose yesterday at economic reports expected to show improvements that could support a Federal Reserve interest rate hike next month.

• National Gallery Singapore,was unveiled by Prime Minister Lee Hsien Loong before it opens to the public from Today.

Singapore News Highlights - 19th Nov 2015

• Singapore shares opened higher following the Wall Street's gain on expectations that the Fed would be confident enough about the US economy to raise rates in December.

 

• SIIC Environment Holdings, recorded more than 100.6 million shares, making it the most active counter yesterday.

 

• Cosmosteel posted a 49.3% drop in net profit to S$1 million for the quarter ended Sept 30, 2015.

 

• Sembcorp Marine won a floating storage offloading vessel construction contract from Modec.

 

• Kepple T&T appointed Tan Eng Hwa as CFO & Desmond Gay Kah Meng as CEO.

 

• Air Liquide SA's US$10.3 billion takeover of rival Airgas Inc has given the European company a leading share of the US market in industrial gases amid forecasts of further construction and manufacturing growth.

 

• Oil prices higher as traders weighed a small gain in US inventories and a Federal Reserve report that supported expectations of a December interest rate hike.

 

• USD low against the euro after the minutes of the Federal Reserve's October policy meeting reinforced expectations of an interest rate hike next month.

 

• Due to the recent global developments that aim to clamp down on Base Erosion and Profit Shifting practices of some multinationals, and also increasing emphasis on tax transparency, there is need for Singapore to re-position itself for value creation to fuel its economy's growth.

 

• Fed officials continue to flag December as a likely time for interest rates to rise after 7 yrs near zero & expressing confidence they will be able to pull off a rate hike smoothly despite fears of an abrupt market reaction.

 

• SGX partnered EBS BrokerTec, ICAP's electronic FX and fixed income business, to launch SGX-listed FX block futures on EBS BrokerTec's FX central limit order book- EBS Market, a primary venue for e-traded currencies.

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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.

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.