As we bid farewell to the past year, a wave of optimism has swept across the markets, fueled by the potential of US interest rate cuts.
The Singapore’s Straits Times Index (STI) closed notably higher at 3,240.27, marking a 5.44% increase over the previous month.
This surge came as a response to the US’s moderating inflation data, stirring expectations of a Federal Reserve move towards rate reductions in 2024.
Singapore’s economic resilience
In Singapore, the Non-Oil Domestic Exports (NODX) ended its 13-month contraction, registering a 1% year-on-year growth in November 2023.
This long-awaited turnaround, although slightly below Bloomberg’s 1.5% projection, was driven largely by a strong performance in non-electronic exports, which saw a 5.2% increase.
However, the electronics sector continued to struggle, with a 12.7% decline, impacted by falling sales in key components like integrated circuits and PCs.
The real estate market presented a mixed bag.
New private home sales in November soared by over 200% year-on-year, a sharp rebound attributed to the launch of three new projects.
Despite this surge, overall home demand for 2023 appears to be trending towards its lowest since 2008, a consequence of high interest rates and property cooling measures.
The resale market, meanwhile, showed more stability with private condo resale volumes rising by 6.3% year-on-year.
Rental markets, on the other hand, experienced a downturn, with both prices and volumes declining for the fourth consecutive month.
Nonetheless, rental rates were still 6.3% higher compared to the previous year.
Oil & Gas, S-REITs, and Tech lead gains in December
On the sectoral front, all market sectors ended positively in December 2023, with Oil & Gas, REITs, and Technology leading the gains.
The optimism surrounding REITs was particularly notable, driven by the anticipation of lower interest rates.
Among the index constituents, Mapletree Pan Asia Commercial Trust (SGX: N2IU), CapitaLand Integrated Commercial Trust (SGX: C38U) and Mapletree Industrial Trust (SGX: ME8U) stood out as top gainers.
Conversely, Utilities, Financials, and Consumer Goods lagged behind.
Notable corporate developments in December
- ComfortDelGro Corporation Ltd (SGX: C52) announced its plan to acquire A2B Australia for A$165 million.
- In a strategic green energy investment, Keppel Infrastructure Trust (KIT) (SGX: A7RU) is set to acquire a 45% stake in a solar portfolio from Germany’s Empal for EUR109 million.
Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.
