5 things to know before the Singapore market trades this week: Aug 10-16

Singapore skyline on July 27, 2015.
Singapore skyline on July 27, 2015. PHOTO: LIM YAOHUI FOR THE STRAITS TIMES

1. Monday is D-Day for Noble

The saga of Singapore-listed Noble Group, which has been battling to restore investor confidence ever since an anonymous group, Iceberg Research, published a report alleging accounting fraud back in mid-February, is likely to come to a head this week.

On Monday, Asia's largest commodities trader will release its second-quarter results and a PwC review of its accounting practices in an open investor conference call at 7pm.

Noble announced last Monday that it was bringing forward its earnings announcement - which it is flagged as a "satisfactory" set of figures - as it stepped up its campaign to reverse a dramatic plunge in its share price. The Hong Kong-based company also fully redeemed US$735 million in bonds last Friday, countering rumours that it could not repay them.

Noble also said it will give more information on Monday on some of the accounting issues Iceberg has attacked - namely the valuation of its minority investment in Yancoal Australia and inventory sales. The findings of the PwC review will cover how Noble values its assets and accounts for future profits.

Will Noble succeed in reassuring investors and silencing its critics? The stakes are high - short sellers have savaged Noble's shares which have lost more then 50 per cent of their value since mid-February.

2. Tuesday is GDP-Day for Singapore

Singapore's final figures for second-quarter gross domestic product will be released at 8am on Tuesday.

GDP probably grew 1.5 per cent in the April-June quarter from the same period in 2014, less than the 1.7 per cent in the advance estimate release last month, a Reuters poll of economists showed.

Expectations for a slight downward revision to second-quarter GDP growth have grown after data last month showed that Singapore's factory activity in June shrank 4.4 per cent from a year ago, as China's slowdown and lacklustre growth worldwide hammered the marine and offshore engineering sectors and weakened electronics and pharmaceuticals.

On a quarter-on-quarter basis, GDP likely contracted 4.6 per cent from the Jan-March period on an annualised basis, in line with the government's earlier estimate, the Reuters survey showed.

The Ministry of Trade and Industry's second-quarter Economic Survey of Singapore report will also include data on the economy's sectoral performance, inflation, employment and productivity.

3. A slew of likely dismal Asia data ahead

The gloom is Asia-wide, and not confined to Singapore.

Malaysia releases its second-quarter GDP data on Thursday, followed by Hong Kong on Friday. Malaysia's annual growth likely slowed to 4.5 per cent in the April-June quarter, a Reuters poll showed, down from 5.6 per cent in the first three months of 2015, as the rout in commodity prices and weak domestic demand weigh. Hong Kong economy is forecast to have grown just 0.1 per cent from the previous quarter, Moody's Analytics said, as slower income growth and the anti-corruption campaign in China take their toll on the city's trade, retail and financial sectors.

China rolls out data on fixed asset investment, factory production and retail sales on Wednesday but what investors are waiting for is more moves by Beijing to stimulate the moribund economy, especially after reports over the weekend showed that China's exports shrank five times more than economists estimated and producer prices fell by the most in almost six years.

4. US rate hike - close but not certain

The search for clues to whether the Federal Reserve will raise US interest rates in September for the first time in nearly a decade is almost over.

US employment rose at a steady clip in July and wages rebounded after unexpectedly stalling in June, signs of an improving economy that could open the door wider to a rate hike soon. But last Friday's data did not cement expectations the Fed will act next month.

"Because this report was not extraordinarily strong, it was simply in line with expectations, that leaves the markets having to look toward other data," said Paul Christopher, head global market strategist at Wells Fargo Investment Institute told Reuters.

July retail sales, expected on Thursday, will be the key number to look for, while comments by Fed policymakers Dennis Lockhart and William Dudley will also be carefully scrutinised. Atlanta Fed president Lockhart, a centrist who votes on the Fed's policy-setting Open Market Committee, is due to speak on Monday, with New York Fed president Dudley, seen as a dove and a close ally of Fed chair Janet Yellen, following on Wednesday.

5. Same goes for Greece

Greece's marathon talks to seal a third bailout with its international creditors have entered their final stretch.

Greek finance and economy ministers were back at the negotiating table with the European Central Bank, the International Monetary Fund and the European Stability Mechanism on Sunday to finalise the draft of a 86 billion euros (S$129 billion) loan in exchange for further reforms before the debt-ridden country must repay 3.4 billion euros to the ECB on Aug 20. Talks were going well and could be wrapped up on Tuesday, an EU source told AFP, adding that discussions had narrowed down to the list of priority actions that Athens must commit to. An agreement will have to be reached by Aug 17 to prevent Greece from having to ask for a bridging loan to avoid another loan default.

In other key European events, Tuesday sees the release of Germany's ZEW investor sentiment index for August, while Friday brings second-quarter preliminary GDP data on the euro zone and its key members - Germany, France - to gauge the strength of recovery in the region after German and French industrial output data last week disappointed.