Singapore Economic News

[Big Toe]

The SGD is slightly out of sync with current economic fundamentals.
It has weakened against the greenback but held rather steady with the rest of the major currencies.
It ought to weaken further, chances are that it would.

Domestically, higher priced imports(we import everything) will hurt local consumption.
China has been supplying the world with cheap goods, and prices are slowly creeping up as business costs there spike.
So we are in what looks like a perfect storm for companies depending on local consumption.

Rising Interest rates, no more cheap money for weak companies/weak property investors to stay alive.
Rising import prices.
Weak domestic consumption.
Weakening currency.(maybe)
Job market getting worse.

To be fair, many companies are currently quite fairly valued in the SGX with a small handful that is undervalued.
But with little or no growth, the downside risk has increased somewhat.

I have halved my position in stocks locally. 5% of Portfolio in the local market now.
Would not hesitate to increase if there is anything with a screaming buy, but no rush, from the way things are.

[Dosser]

Agree with the comment from Big Toe that the S$ is out of sync with the local economy. I am wondering what precautions other VB are taking?

Personally, I have further reduced my holdings in the local market to boost my holding of Canadian Dollars. Another weak currency, but of direct use to me as my son lives there and I may retire there, so it is really a case of guarding against a sudden depreciation of the S$. I have been holding US$ and HK$ for some time, which have been a one way bet this year.

Locally, things don't look good for the moment, and, more generally, the political and economic landscape worldwide is changing, and there is a risk of markets skidding suddenly. On the other hand, interest rates are still incredibly low, and only moving up slowly; in that context, the dividend yield on selected local stocks is very attractive. So while I have done some selective selling, it has been limited.

[TTTI]

Agree with the comment from Big Toe that the S$ is out of sync with the local economy. I am wondering what precautions other VB are taking?

Personally, I have further reduced my holdings in the local market to boost my holding of Canadian Dollars. Another weak currency, but of direct use to me as my son lives there and I may retire there, so it is really a case of guarding against a sudden depreciation of the S$. I have been holding US$ and HK$ for some time, which have been a one way bet this year.

Locally, things don't look good for the moment, and, more generally, the political and economic landscape worldwide is changing, and there is a risk of markets skidding suddenly. On the other hand, interest rates are still incredibly low, and only moving up slowly; in that context, the dividend yield on selected local stocks is very attractive. So while I have done some selective selling, it has been limited.

On the surface of it, you're right in concluding that the S$'s relative strength is unusual, considering the economic conditions we are facing going forward.
But it is very hard to predict with accuracy Fx. S$ may not depreciate relatively speaking, for the entire 2017, perhaps even longer.
Even if it does, the extent may not make it worthwhile for one to try to convert your investment portfolio's "reporting currency" or increase exposure to another currency.

I think if you have certain conditions, like in your case, exposure to Canadian dollars because there are some familial links there, that makes sense.
If one has absolutely no link, it doesn't make sense to try to increase exposure to another currency just to diversify, unless you have a strong conviction about the way the particular currency pair is moving.

Having said all that, i think it is wise to have at least some exposure to US$ either directly, or indirectly via US$ denominated equities in the next 1-2 years.

[BlueKelah]

One simple explanation for market going different direction from fundamental is that a lot of funds have been release from sell off in bond markets worldwide. This has helped deflate the bond bubbles. But the money has to go somewhere, thus influx into stocks and shares loh.

In the short term stocks will rally, but in the longer term stocks will suffer if no rebound in ecoNomy.

IMHO USD and us stock market will have a good run this December, especially if fed confirms the rate rise next week.

Only thing to stop it is another slide in oil prices from oversupply and if the non Opec members dun cooperate to cut supply.

Sent from my MotoG3 using Tapatalk

[corydorus]

Someone has to pickup on what the fund released. Net net not much diff. What may happen is in net, foreign funds are back to US.

I do agree from the point that SG salary relative to other countries on average are too high. It is very difficult to lower salary to be competitive and the easier way is to devalue S$. So I am pretty optimistic we are in the right direction relative to USD, RMB and NT.
How far it will go, I dunno but we have moved a large chunk.

[BlueKelah]

And our first sign of recession coming up : 


COEs finish mostly lower in first round of bidding in December 2016

SINGAPORE - Certificate of Entitlement (COE) prices finished mostly lower in the first round of bidding in December on Wednesday (Dec 7).

Premiums for Category A - cars up to 1,600cc and 130bhp - went down from $50,951 to $48,000.

COE prices for Cat B - cars above 1,600cc or 130bhp - decreased, from $53,001 to $46,229.

For the open category, Cat E, which can be used for any vehicle type but ends up mainly being used for bigger cars, COE prices also fell, from $54,901 to $50,010.

Motorcycle premiums ended lower, going from $6,212 to $6,113.


COE premiums for goods vehicles and buses was the only that went up, from $49,002 to $51,209.

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I am hoping for sub 10k next year

[specuvestor]

Agree with the comment from Big Toe that the S$ is out of sync with the local economy. I am wondering what precautions other VB are taking?

Personally, I have further reduced my holdings in the local market to boost my holding of Canadian Dollars. Another weak currency, but of direct use to me as my son lives there and I may retire there, so it is really a case of guarding against a sudden depreciation of the S$. I have been holding US$ and HK$ for some time, which have been a one way bet this year.

Locally, things don't look good for the moment, and, more generally, the political and economic landscape worldwide is changing, and there is a risk of markets skidding suddenly. On the other hand, interest rates are still incredibly low, and only moving up slowly; in that context, the dividend yield on selected local stocks is very attractive. So while I have done some selective selling, it has been limited.

On the surface of it, you're right in concluding that the S$'s relative strength is unusual, considering the economic conditions we are facing going forward.
But it is very hard to predict with accuracy Fx. S$ may not depreciate relatively speaking, for the entire 2017, perhaps even longer.
Even if it does, the extent may not make it worthwhile for one to try to convert your investment portfolio's "reporting currency" or increase exposure to another currency.

I think if you have certain conditions, like in your case, exposure to Canadian dollars because there are some familial links there, that makes sense.
If one has absolutely no link, it doesn't make sense to try to increase exposure to another currency just to diversify, unless you have a strong conviction about the way the particular currency pair is moving.

Having said all that, i think it is wise to have at least some exposure to US$ either directly, or indirectly via US$ denominated equities in the next 1-2 years.

Fiat currency is a relative game. In the current context it is relative to USD. Thats why some wants to be relative to the SDR. Sounds good but hard to execute. China is slowly letting trades settle in RMB so that there can be more transactions being relative to RMB.

CAD and AUD are commodities currencies, so the view is roughly whether China will slow down significantly and reduce raw materials consumption. Relative to US, it's whether next 4 years China can deliver better or US can fiscal pump better in REAL terms; and the FX will adjust accordingly. Relative to SGD is bit more complex cause we are like an average of Asian currencies against US

[Big Toe]

And our first sign of recession coming up : 


COEs finish mostly lower in first round of bidding in December 2016

SINGAPORE - Certificate of Entitlement (COE) prices finished mostly lower in the first round of bidding in December on Wednesday (Dec 7).

Premiums for Category A - cars up to 1,600cc and 130bhp - went down from $50,951 to $48,000.

COE prices for Cat B - cars above 1,600cc or 130bhp - decreased, from $53,001 to $46,229.

For the open category, Cat E, which can be used for any vehicle type but ends up mainly being used for bigger cars, COE prices also fell, from $54,901 to $50,010.

Motorcycle premiums ended lower, going from $6,212 to $6,113.


COE premiums for goods vehicles and buses was the only that went up, from $49,002 to $51,209.

-------------------------------------------------------------------------------------------------------

I am hoping for sub 10k next year

Damn... Was waiting to get a new van, now my hopes are dashed
Commercial vehicle COE most expensive now.
So what that means is that I should be very proud of driving my beat up van, whatever is left of it.
The joy of throwing all my barang into the van and paying Diesel @ $1 per 20km. Used to pay petrol @ $1 for my car and that got me about 5-6km.
But van is not without its disadvantages

1. Slower
2. Less comfortable
3. Cant go Msia
4. Cant go into many old and low height clearance car parks
5. In some places I park, it is the only van there. Very strange feeling. (well, it is a lifestyle choice)

[BlueKelah]

And our first sign of recession coming up : 


COEs finish mostly lower in first round of bidding in December 2016

SINGAPORE - Certificate of Entitlement (COE) prices finished mostly lower in the first round of bidding in December on Wednesday (Dec 7).

Premiums for Category A - cars up to 1,600cc and 130bhp - went down from $50,951 to $48,000.

COE prices for Cat B - cars above 1,600cc or 130bhp - decreased, from $53,001 to $46,229.

For the open category, Cat E, which can be used for any vehicle type but ends up mainly being used for bigger cars, COE prices also fell, from $54,901 to $50,010.

Motorcycle premiums ended lower, going from $6,212 to $6,113.


COE premiums for goods vehicles and buses was the only that went up, from $49,002 to $51,209.

-------------------------------------------------------------------------------------------------------

I am hoping for sub 10k next year

Damn... Was waiting to get a new van, now my hopes are dashed
Commercial vehicle COE most expensive now.
So what that means is that I should be very proud of driving my beat up van, whatever is left of it.
The joy of throwing all my barang into the van and paying Diesel @ $1 per 20km. Used to pay petrol @ $1 for my car and that got me about 5-6km.
But van is not without its disadvantages

1. Slower
2. Less comfortable
3. Cant go Msia
4. Cant go into many old and low height clearance car parks
5. In some places I park, it is the only van there. Very strange feeling. (well, it is a lifestyle choice)

aiyah no problem wait recession really come COE will dip below $20k u can get a nice Turbo-diesel SUV or Hilux. I also saw one super power electric van on youtube, maybe u can pick up one next year when the EV finally hit the mainstream market.

If a recession hits, which can happen suddenly despite the year end party on SGX at the moment, next year quota, for CAT A and B, should be still quite high as quota for these two (>50k) peaked during end 2006 to end 2007 period before the GFC hit and those will COEs would be expired soon in the coming year and used in the quota calculations.

Besides its calculated every 3 months, so when recession suddenly come, we still have at least 3-6 months to buy before the gov. adjust the quota down too much..

[BlueKelah]

Looks like Singapore might avoid recession for some time yet with strong sectors of pharma, biomedical and electronics/semicon this last quarter 2016.

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Singapore's manufacturing output up 11.9% in November

[STRONG ELECTRONICS AND PHARMACEUTICALS OUTPUT
Output of the biomedical manufacturing cluster grew 34.8 per cent in November, compared to the same month last year, while the pharmaceuticals segment expanded 36.1 per cent. The growth was mainly due to a different mix of active pharmaceutical ingredients and biological products produced, said EDB. The medical technology segment also posted a growth of 30.8 per cent, with high export demand for medical instruments, it added. 

Meanwhile, the electronics cluster's output increased 24.2 per cent in November on a year-on-year basis. According to EDB, growth in the cluster was largely attributed to the semiconductors segment, which grew 49.6 per cent.

Output of the precision engineering cluster grew 7.6 per cent, compared to a year ago. The machinery and systems segment grew 10 per cent as export demand for semiconductor-related equipment increased, while the precision modules and components segment recorded higher output of industrial rubber and dies, moulds, tools, jigs and fixtures. ]

[General manufacturing industries' output declined 0.9 per cent year-on-year, mainly attributed to the miscellaneous industries and printing segments which contracted 4.5 per cent and 16.2 per cent respectively.  

The transport engineer cluster's output shrank the most, contracting 14.8 per cent compared to the same month last year. The land transport segment grew 12.2 per cent, but this was offset by declines in the aerospace and marine and offshore engineering segments.]