5 things to know before the Singapore market opens this week: Sept 7-13

An investor walks past a digital board showing stock market movements at a brokerage house in Shanghai.
An investor walks past a digital board showing stock market movements at a brokerage house in Shanghai. PHOTO: AFP

1. All eyes will be on stock markets across Asia, most notably mainland China when trading opens this week after the severe volatility in recent weeks.

Chinese investors have not traded since Wednesday (Sept 2) last week, thanks to a holiday-shortened trading week. In Shanghai, the main market indicator, the Shanghai Composite Index, has fallen about 40 per cent since June, and some observers fear the worst may not be over.

On Friday on Wall Street, the Dow Jones Industrial Index lost 1.66 per cent or 272 points on relatively weak jobs data as investors continue to fret over the outlook for the United States, which is seen to be doing better economically than other major economies.

2. The guessing game over just when the United States Federal Reserve will raise interest rates for the first time since the global financial crisis is continuing.

The latest jobs data, out last Friday, came in weaker than experts had predicted, sparking some speculation the Fed may choose to act later rather than sooner if the US economy is still seen as struggling to generate jobs. Some experts still believe a rate rise could come as soon as this month though most regard later in the year as more probable.

3. Key economic data is due out this week, including revised economic growth figures for Japan due out Monday.

If the figure comes in weak, this could fan concerns over the health of the world's third largest economy. A poll by Reuters found experts expect the Japanese economy to have contracted 1.8 per cent in the April to June period - somewhat weaker than the initial estimate of 1.6 per cent. Data on second quarter economic growth in the European Union is due out on Tuesday. No major data is due out in Singapore, although the Monetary Authority of Singapore will release data on the nation's foreign reserves on Monday.

4. Singapore investors are facing a shortened trading week owing to the public holiday on Friday Sept 11 for the general election.

Investors will be watching developments in other key world markets closely during the first four days of the trading week for clues on how they should position themselves ahead of the three-day trading break.

5. Investors will be sizing up the revamped Straits Times Index this week after an announcement last week.

The closely-watched barometer of 30 blue chip stocks will feature three new faces on Sept 21. Following a twice-yearly review, the new STI will include property giant UOL Group, Chinese shipbuilder Yangzijiang Shipbuilding Holdings and airport ground-handler and food solutions provider Sats.

They will replace Jardine Matheson Holdings, Jardine Strategic Holdings and commodities trader Olam International. The STI will now more accurately reflect market action in Singapore given that the two Jardine group counters, while major companies, were relatively thinly-traded.