Market Commentary II
What an interesting week!
China announced that they will be taking measures to cool down its economy. This will be especially negative for commodities, especially metals, as they are used extensively in manufacturing. Goldman Sachs also downgraded some large mainland steelmakers as well as Aluminum Corp. of China.
The U.S. also proposed curbs on the important banking industry. President Obama said he wanted financial-sector legislation to include measures to stop banks engaging in proprietary trading and investing in hedge funds and private equity – which are important sources of income for banks. These two major pieces of news caused a market crash late in the week.
On Friday, Japan's Nikkei 225 fell 2.6%, Australia's S&P/ASX 200 lost 1.6%, China's Shanghai Composite dropped 1%, South Korea's Kospi gave up 2.2%, Hong Kong's Hang Seng Index shed 0.7% and Taiwan's main index shrank 2.5%. India's Sensex declined 1.1% and Singapore's Straits Times lost 1.1%.
Closer to home, Tiger Airways, which SIA is a major shareholder of, has become the first Asian carrier to be listed in five years. The stock closed at S$1.58 compared with its initial public offering at S$1.50. Also, hiring expectations in China, Hong Kong and Singapore are up sharply in the first quarter this year, boosted by growing optimism about economic recovery, a quarterly survey by a recruitment agency revealed. This is certainly good news for our fresh graduates.
Lastly, CapitaLand Ltd.'s purchase of Orient Overseas (International) Ltd.'s China property business for US$2.2 billion, which will allow the property developer to expand easier in China. The deal is expected to be completed by the end of March, and will effectively double CapitaLand's China property portfolio to 2.8 million sqm and boost its China assets to 36% from 28% of its total portfolio.
By Lieow Li Ping James, Research & Education Executive
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