Over the fortnight, the US and China slapped each other with trade tariffs on some US$34 billion worth of goods. In view of China’s retaliatory tariff, Trump escalated the trade war by threatening to impose further tariffs of 10 percent on an additional US$200 billion worth of Chinese imports. The new tariff threat sparked off another global selloff on 11 July 2018.
The Singapore Government announced a set of property cooling measures effective 6 July 2018 aimed at moderating home price growth. The authorities raised the Additional Buyer’s Stamp Duty (ABSD) by 5 percentage points for owners of second and subsequent residential properties purchases as well as lifting Loan-to-Value (LTV) limits by 5 percentage point for all new housing loans. On the other hand, developers will now incur a higher remissible ABSD of 25 percent, on top of an additional 5 percent non-remittable ABSD for enbloc transactions.
From the high of 3,615 on 2 May to 2 July, the Straits Times Index (STI) tumbled 10.4% to 3238.94 on fears of rising interest rate and the ongoing trade war. In view of the above, UOBKH believes that the STI may head towards 3,100 at a worst-case scenario.
The Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers have collectively agreed to raise supply as of 1 July 2018, which deals with the unplanned supply disruptions in Venezuela, Iran, Libya and Nigeria.
The Telecommunication sector remains under pressure with the entry of two new Mobile Virtual Network Operators (MVNOs), Circles.Life and Zero Mobile as well as the impending debut of TPG Telecom (TPG) as the fourth mobile network operator. In an already-saturated market, existing operators will likely see their mobile average revenue per user (ARPU) and broadband ARPU pinched in the increasingly competitive environment. In anticipation of TPG’s entry, analysts are projecting that the new entrant could secure a market share of about six percent by 2021. Why then is Singapore Telecommunications (Singtel) still the sole buy pick in a subdued sector?
According to Urban Redevelopment Authority’s (URA) data, the private residential property price index rose 3.9 percent quarter-on-quarter in 1Q18, ahead of its initial 3.1 percent flash estimate. The stronger-than-expected rebound signals that the four-year slump is indeed over and Singapore’s residential property market is in the early stages of a recovery.