Singapore stocks end in the black as GDP growth surpasses expectations

SINGAPORE - Stocks in Singapore rose on Nov 22 as the Republic’s economy exceeded expectations for third-quarter growth, prompting the Government to revise year-on-year growth for the third quarter upwards to 5.4 per cent and adjust the full-year growth forecast for 2024 to around 3.5 per cent.

The full-year growth forecast upgrade takes into account better-than-expected performance in the first three quarters of the year, with gross domestic product (GDP) growth for the first nine months reaching 3.8 per cent, said the Ministry of Trade and Industry on Nov 22.

The benchmark Straits Times Index (STI) climbed 0.2 per cent or 6.8 points to close at 3,746.02.

Across the broader market, gainers outnumbered losers 265 to 251, after 1.8 billion securities worth $1 billion changed hands.

Singapore’s third-quarter 2024 GDP growth was driven primarily by the manufacturing, wholesale trade and finance and insurance sectors, noted Ms Selena Ling, chief economist and head of global markets research and strategy at OCBC Bank.

However, she cautioned that the global trade and growth environment may turn even more challenging in 2025 with incoming US president Donald Trump threatening punitive trade tariffs against China and potentially a universal 10 per cent to 20 per cent tariff against the rest of the world.

“Assuming that Trump’s policy shifts on tariffs, immigration and tax, et cetera, do materialise and are inflationary as anticipated, the Fed’s intended rate cut trajectory could be impacted, and this could in turn complicate the 2025 growth and inflation outlook for the global economy, including Singapore,” said Ms Ling.

UOB economist Jester Koh, meanwhile, expects growth momentum in Singapore’s trade-related sectors to continue for the rest of 2024 and into early 2025. This will be driven by the ongoing recovery in the electronics cycle and supported by the front-loading of exports ahead of the proposed tariffs on US imports under Trump’s administration.

“For the rest of 2025, the outlook is somewhat cloudy given uncertainty surrounding the extent and timing of Trump’s touted tariffs, heightened geopolitical tensions, possible peak in the electronics cycle and pace of monetary easing by major central banks globally,” he said.

This uncertain global environment is already reflected in the performance of regional markets, which ended mixed. Hong Kong’s Hang Seng Index fell 1.9 per cent, while Japan’s Nikkei 225 gained 0.7 per cent. South Korea’s Kospi Composite Index climbed 0.8 per cent and Malaysian shares closed 0.1 per cent up.

On the STI, Frasers Logistics and Commercial Trust was the biggest loser, down 2.7 per cent or three cents to 91 cents. Genting Singapore was the biggest gainer, up 2 per cent or two cents to 77.5 cents. THE BUSINESS TIMES