Business

Markets entering jittery period of uncertainty

Observers pleased with Singapore's GDP growth rate, but not headline inflation and industrial production

Readers may be ready to click "buy" to add to their Cyber Monday shopping baskets, but their willingness to do the same on the bourse may be more variable.

Markets last week survived fits of volatility to turn out a respectable, if not strong, finish.

Still, it remains to be seen how well traders around the world will ride out an uncertain period and this year's rally in equities stays stubbornly dogged by whispers of the word "bubble".

The fear was particularly pronounced in China last week, when the Hang Seng hit a decade high just as jittery mainland investors dropped everything and ran for the hills amid concerns that regulators would put an end to speculation and over-valuation in both equities and bonds.

Even in the nearer term, other hurdles - some of them regrettable but preventable - have cropped up.

The index in Tokyo did modestly well, but Mitsubishi Materials late last week joined the rogues' gallery of established Japanese manufacturers that have ended up with egg on their faces after compliance scandals.

With the safe-haven yen's advances against the greenback already posing a challenge to exporters' lustre, the latest shocker on the Japanese industrial scene - which was already reeling from a similar case of misconduct at Kobe Steel last month - could weigh on Japan in the coming week.

Meanwhile, New York returned from its Thanksgiving break to see major indices track steady gains and hold on to their highs on Black Friday.

UOB analysts also wrote in their latest weekly forecast: "After the Thanksgiving holiday, US domestic politics will resume its exhaustive focus on tax reform.

"However, this week's focus could be on US President Trump's scheduled meeting with Democratic and Republican congressional leaders on Tuesday to discuss a federal spending plan to keep the government open and prevent any partial shutdown after current funding expires on Dec 8."

Separately, the management shake-up at the Federal Reserve should light a fire under the American indices this week.

The US Senate Banking Committee is set to hold a confirmation hearing on Tuesday for Jerome Powell, nominated to replace Janet Yellen as Fed head.

Markets are expected to buck up and pay attention to what Mr Powell could have to say about the mysteriously low US inflation, in particular.

On Wednesday, after third-quarter growth numbers for the US come out, Ms Yellen will update Congress on America's economic outlook.

INFLATION

Closer to home, observers of the Singapore economy were last week kept happy by the sterling third-quarter gross domestic product growth rate, but headline inflation was ho-hum and industrial production came in slightly below forecasts, which could dampen the party mood somewhat.

Deloitte Southeast Asia has noted that investor appetite for initial public offerings remains buoyant.

Japanese food and beverage group RE&S Holdings made its debut on the sponsor-supervised secondary platform last week, while MindChamps Preschool hit the ground running on the mainboard.

This week will see seafood restaurant chain No Signboard join in the fun, probably alongside the revamped, euro-denominated Cromwell Reit.

The market watchers at UOB also noted that "market attention will likely stay on the news flow regarding potentially higher taxation in Singapore, likely the form of a tax hike in the goods-and-services tax".

For sure, the dull moments this year do not last long.

For full listings of SGX prices, go to http://btd.sg/BTmkts

BUSINESS & FINANCE