SGX Market Updates: Anticipated US Fed Rate Cut and Singapore’s Economic Resilience

January 2, 2024

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

  1. ComfortDelGro Corporation Ltd (SGX: C52) announced its plan to acquire A2B Australia for A$165 million.
  2. 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.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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