Investors’ nerves were tied to the developments of trade war between US and China in the last couple of weeks, as the global stock market whipsawed violently in both directions. Dow Jones Industrial Average (DJIA) plunged more than 510 points in the opening on 4 April 2018 following news that China plans to retaliate with a matching tax on US$50 billion worth of American products. However, DJIA swiftly recovered rallying 741 points, to end the day in positive territory as Trump softened stance. Last fortnight, DJIA rose 2.3 percent to close at 24,505.22.
Over in Asia, Nikkei 225 extended a gain of 4.6 percent to end at 21,567.52. Meanwhile, both Hang Seng Index and Shanghai Composite Index lost 1.5 percent and 0.7 percent respectively.
Singapore’s Purchasing Managers’ Index came in at 53.0 for March 2018 rising 0.3 point from the previous month. This marked the 19th consecutive month of expansion for the manufacturing sector, underpinned by faster growth in factory output as well as higher new orders and new exports.
In the local property sector, Urban Redevelopment Authority’s private home price index in 1Q18 jumped 3.1 percent according to its first quarter flash estimate. This was the steepest hike since 2Q10 and came as a surprise to property watchers, causing many of whom to raise their estimates for the full year growth.
News of a potential acquisition of Uber by private hire car services Grab seized the headlines and a lot of uncertainties surrounded how the deal may turn out. We think that sharp corrections in the local equities market are unlikely given that most companies have yet to pay out their dividends. However, we would expect volatility to persist in May especially after the banks distribute their payouts. Over the course of the past two weeks, Straits Times Index inched up 0.6 percent to close at 3,442.50.