Global stocks extended their decline on renewed trade war concerns that cast a dark cloud on global markets. Trump has announced that his administration will impose tariffs on US$34 billion worth of Chinese imports which was due to take effect next week on 6 July 2018. While it is likely that Trump administration would negotiate trade deals and not engage in a full-blown trade war, any escalation in tensions at the moment will still be very disruptive. Volatility has returned to the market which saw the Dow Jones Industrial Average losing 3.9 percent to finish at 24,216.05.
Meanwhile to reduce its reliance on US soybeans amid mounting trade disputes, China has decided to seek alternative supplies by cutting import tariffs on soybeans and other animal feed ingredients from five Asian countries – Bangladesh, India, Laos, South Korea and Sri Lanka from 1 July 2018. In addition, The People’s Bank of China said on 24 June 2018 that it will drop the reserve requirement ratio of banks by 50 basis points which could release about 700 billion yuan of liquidity to stabilize the financial markets. Nonetheless, these measures seem inadequate to allay fears as Hang Seng Index and Shanghai Composite Index sank 4.9 percent and 6.5 percent respectively over the last two weeks.
According to monthly manufacturing performance report released by the Economic Development Board, Singapore’s manufacturing output jumped 11.1 percent in May 2018 driven by the pharmaceutical segment which grew 19.2 percent. Electronics output expanded 17.1 percent with a robust growth of 26.9 percent posted by the semiconductors segment while the rest of the electronics segments registered a fall in output.
After months of debate, companies seeking a mainboard listing in Singapore offering dual-class shares may now be able to do so as Singapore Exchange finally gave the go-ahead to revamp its listing rules to accommodate dual-class shareholding.
In comparison to regional peers, the local bourse seems relatively less pessimistic with benchmark Straits Times Index dropping only 2.6 percent to end at 3,268.70 last fortnight.