Market Insights

Eye on events, news after volatile week

Seafood restaurant chain No Signboard is set to make its debut on the Catalist board this week. Besides the spate of mainboard and Catalist listings on the local bourse, other things market watchers are focused on include news on the potential hike i
Seafood restaurant chain No Signboard is set to make its debut on the Catalist board this week. Besides the spate of mainboard and Catalist listings on the local bourse, other things market watchers are focused on include news on the potential hike in goods and services tax in Singapore.PHOTO: NO SIGNBOARD

Markets put up decent showing but concerns like Trump probe could dampen mood this week

Readers of this paper are probably ready to click "buy" for their Cyber Monday shopping baskets, but it is uncertain if they will do the same on the bourse.

Markets last week survived fits of volatility to turn out a respectable, if not strong, finish.

Still, it remains to be seen how well traders around the world will ride out an uncertain period, as November wraps up and this year's equities rally stays stubbornly dogged by whispers of the word "bubble".

The fear was particularly pronounced in China last week, where the Hang Seng hit a decade high just as jittery mainland investors dropped everything and ran for the hills amid concerns that regulators would put an end to speculation and over-valuation in both equities and bonds.

Whether the weekend served as a cooling-off period will remain to be seen today.

Meanwhile, New York returned, stuffed with turkey and cranberry sauce from its Thanksgiving break, to see major indices track steady gains and hold on to their highs on Black Friday. The S&P finished last Friday up by 0.21 per cent, the Dow by 0.22 per cent and the Nasdaq by 0.2 per cent.

But the holiday weekend was also marked by US news reports on developments in the investigation into possible foreign influence on United States President Donald Trump's election campaign last year.

UOB analysts, writing in their latest weekly forecast, said: "After the Thanksgiving holiday, US domestic politics will resume its exhaustive focus on tax reform but this week's focus could be on US President Trump's scheduled meeting with Democratic and Republican congressional leaders on Tuesday to discuss a federal spending plan to keep the government open and prevent any partial shutdown after current funding expires on Dec 8."

Closer to home, Singapore economy observers were last week kept happy by the sterling third-quarter gross domestic product growth rate, but headline inflation was ho-hum and industrial production came in slightly below forecasts, which could dampen the party mood somewhat.

Yet, even without any earth-shaking data slated for release this week, local equities need not find themselves in want of a serious adrenaline rush.

Penny-stock activity was jumping like fleas on a mangy dog towards the end of last week, and it may prove interesting to keep an eye on whether that momentum carries forward into this week.

Something else to watch out for is the spate of mainboard and Catalist listings on the local bourse this year - a phenomenon that has made its presence keenly felt lately.

Deloitte South-east Asia has noted that investor appetite for initial public offerings remains buoyant.

Japanese food and beverage group RE&S Holdings made its debut on the secondary platform last week, while MindChamps Preschool hit the ground running on the mainboard.

And this week will see seafood restaurant chain No Signboard join in the fun, alongside the revamped, euro-denominated Cromwell Reit.

UOB market watchers also noted that "market attention will likely stay on the news flow regarding potentially higher taxation in Singapore, likely the form of a tax hike in the goods and services tax".

For sure, the dull moments this year do not last long.

A version of this article appeared in the print edition of The Straits Times on November 27, 2017, with the headline 'Eye on events, news after volatile week'. Print Edition | Subscribe