Market Insights

Brisk pace continues with busy week ahead

Slew of data and earnings results, monetary decisions expected to draw close scrutiny

Workers at a metal factory in Defu Lane. Both the inflation and factory output numbers for the Republic will be keenly awaited - although watchers may not have their hopes too high, after December's modest export figures. Unemployment data and privat
Workers at a metal factory in Defu Lane. Both the inflation and factory output numbers for the Republic will be keenly awaited - although watchers may not have their hopes too high, after December's modest export figures. Unemployment data and private-home prices for Singapore's fourth quarter are slated for release in the coming days. ST FILE PHOTO

The past week was jam-packed with market-moving events. In the coming week, the markets' fast pace looks set to continue.

Singapore's export numbers came in last week.

December's 3.1 per cent growth may have disappointed some watchers, but the full year's rise of 9.2 per cent still came in ahead of forecast and hit a seven-year high.

Meanwhile, local equities' benchmark Straits Times Index (STI) touched 3,550.21 at last Tuesday's close, bringing the bourse performance to levels not seen since the cusp of the global financial crisis.

Traders dithered a little after reaching that milestone, but the index still edged up to 3,550.36 as the exchange shuttered for the week.

Also, China beat predictions to post a 6.9 per cent growth in gross domestic product for 2017 - another seven-year feat, and one that may bring ripples from the world's second-largest economy.

But on the other side of the Pacific, the United States found itself adrift, as Congress hurtled, over the weekend, into another federal shutdown.

The latest stoppage of certain government functions came on the back of partisan disagreement over passing a Bill to keep the lights on in Washington.

So, what lies ahead this week?

Unemployment data and private-home prices for Singapore's fourth quarter are slated for release in the coming days.

And both the inflation and factory output numbers for the Republic will be keenly awaited - although watchers may not have their hopes too high, after December's modest export figures.

Meanwhile, Singapore-based IG Asia market strategist Pan Jingyi said in a note that the STI has largely consolidated between 3,510 and 3,550 in the week.

"With approximately 16 per cent of the companies on the S&P 500 index and four on the STI itself reporting earnings, the results will run alongside economic indicators in guiding the market next week," she wrote.

The four constituent stocks here with results due are Ascendas Reit, CapitaLand Commercial Trust, CapitaLand Mall Trust and Keppel Corporation.

The research team at PhillipCapital has separately said that the index "might be facing some immediate hurdle at the 3,550 resistance area". The team pointed to a recent sharp rise and a "bearish rejection" off the 3,550 mark, "suggesting a near-term correction soon".

And, this week, the World Economic Forum meets in Davos, Switzerland, as it does every year. But this time, UOB senior economist Alvin Liew has figured that "while several key world leaders will be in attendance, the key speech to watch will be US President Donald Trump's inaugural address".

Mr Trump will make his maiden address to the gathering on Friday, just past the one-year anniversary of his swearing-in.

Across the Causeway, Bank Negara Malaysia is coming out with its monetary policy announcement on Thursday.

UOB has pegged the potential rate hike to be a 25 basis point increase to 3.25 per cent.

The Bank of Japan and European Central Bank will also announce their monetary decisions soon.

UOB's Mr Liew said: "While both central banks are widely expected to keep policy unchanged, markets will scrutinise the statement and commentary for indications of policy normalisation."

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A version of this article appeared in the print edition of The Straits Times on January 22, 2018, with the headline Brisk pace continues with busy week ahead. Subscribe