New records making dot-com bubble look sane

This article is more than 12 months old

Like his election campaign, US president Donald Trump's speech at Davos, Switzerland, was centred on his "America First" strategy, aimed at protecting US manufacturers from foreign competition. But on Friday, the speech was more nuanced.

"America First does not mean America alone. When the United States grows, so does the world," Mr Trump told political and corporate elites, stressing that America does not want a trade war, but fair trade.

On Wall Street, stocks surged to fresh highs. Investors shrugged off weaker-than-expected gross domestic product (GDP) growth in the US, and bought up big tech names, while a softer US dollar boosted commodity-exposed sectors.

The Dow Jones Industrial Average rose 223.92 points and hit intraday and closing records, finishing at 26,616.71. The Nasdaq composite advanced 1.3 per cent to close at a record 7,505.77. The S&P 500 also reached an all-time high, gaining 1.2 per cent to end at 2,872.87 - a whopping 7 per cent rally in January alone that is making the dot-com bubble look saner, according to Leuthold Group's Doug Ramsey.

Without a doubt, this has been one of the best Januaries in recent memory, and that bodes well for the market over the rest of the year, note the folks at Bespoke Investment Group.

Some events worth watching out for this week include Mr Trump's State of the Union address in the US, ahead of the Fed FOMC's conclusion.

No policy changes are expected in Fed Chair Janet Yellen's last meeting as the head of the central bank.

Mr William White, head of the Organisation for Economic Co-operation and Development's review board, warns that "all the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten".

America First does not mean America alone. When the United States grows, so does the world. US president Donald Trump at the World Economic Forum

In Singapore, the benchmark Straits Times Index (STI) is likely to be range-bound, with support pegged at 3,500 and resistance at 3,600. The index closed at 3,567.14 on Friday.

Companies scheduled to unveil their earnings this week include Starhill Global Reit and Ascendas India Trust today; OUE Hospitality Trust tomorrow; OUE Commercial Reit and CapitaLand Retail China Trust on Wednesday; Ascendas Hospitality Trust and AIMS AMP Capital Industrial Reit on Thursday as well as SIA Engineering Co and Singapore Post on Friday.

An attempt by Singaporean billionaire Kwek Leng Beng to take full control of Millennium & Copthorne Hotels (M&C) in a deal valuing the business at £2 billion ($3.72 billion) collapsed after minority shareholders blocked the acquisition.

Mr Kwek's firm City Developments (CDL), already M&C's majority investor, secured acceptances from only 47.14 per cent of the London-listed hotelier's minority shareholders for its 620-pence-a-share offer.

That fell short of the 50 per cent threshold needed for the bid to become unconditional and meant the offer lapsed, sending M&C shares down 4.7 per cent to close at 546 pence.

Trading in ESR-Reit and Viva Industrial Trust remain halted amid speculation that the two Reits are in merger talks.

If true, a potential merger could result in a merged entity with a market value of $1.6 billion.

Something appears to be brewing too over at Hotel Grand Central, which has seen its share price quietly inching up to $1.53 a share from $1.40 at the start of the year.

Tan Chee Hoe & Sons Sdn Bhd had bought close to 400,000 shares at $1.41 to $1.47 each in the past two weeks, bumping up its stake to 53.21 per cent, from 53.19 per cent.