Daily Debrief: What Happened Today (Jun 26)
Government urges private sector to stop using full, partial NRIC numbers for authentication
Authorities say this will better protects citizens from impersonation and having their personal data accessed by others.
Johor's billion-ringgit property market braces for higher foreign-buyer tax
Foreigners are scrambling to seal property deals in the state to beat the Jul 1 levy hike. Industry players are concerned over the short notice.
Singapore's millionaire inflow to halve in 2025: report
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Meanwhile, Thailand emerges as South-east Asia's new safe haven, while China's outflow of affluent individuals slows.
Singapore's factory output growth slows to 3.9% in May, but beats estimates
Nearly all clusters, including electronics, have recorded increases in production year on year.
Chinatown Business Association seeks over S$77,700 in backdated rent from Nanyang Old Coffee for outdoor refreshment area
It is also demanding that the cafe remove items that have encroached into the space, and pay legal costs of S$5,500.
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Business Times
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- Business Times
Daily Debrief: What Happened Today (Jul 7)
Stories you might have missed Six golf courses, including at Tanah Merah Country Club, Singapore Island Country Club to close by 2035 Four sites will be released for other uses, while two will be combined for a public golf course. Data Protection Trustmark elevated to Singapore Standard Helps certified organisations show their commitment to effective data protection; other initiatives include a technology adoption guide and an AI regulation sandbox. Low mortgage rates help; but be cautious in pursuing condo dreams as economic outlook weakens BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Don't raid the CPF account for a private home. Tariff tracker: Where South-east Asia and China stand as the clock runs down The 90-day tariff truce is nearly up and the stakes just got higher. From low-key talks to last-ditch concessions, here's how Asean and China are navigating the bumpy patch. Here are the top 10 best performing stocks in Singapore's STI for the first half of the year The trio of local banks – DBS, UOB and OCBC – however, are not on the list, taking 18th, 19th and 20th place, respectively.
Business Times
2 hours ago
- Business Times
Why markets keep rising
[SINGAPORE] When markets suddenly fell following the Tariff Wars announced by US President Donald Trump in April, we shared some perspective to help alleviate the worries and concerns of investors. Yes, we talked about how global stock markets – and especially the US stock market – have ridden out volatility and price fluctuations, and continued to grow and rise over long periods of financial history. However, when markets are down, it is a great opportunity to get a bit philosophical about investing and also think about why you are investing. So we also talked about the longer and broader perspectives that are not normally discussed in these circumstances, but are highly relevant. We talked about the history of the universe and how the universe has never stopped expanding. In fact, scientists think that it expands at an accelerating pace. We brought up the fact that the human race has continued to expand with the human population reaching new historic highs crossing eight billion in November 2022. It took all of human history to reach one billion at the turn of the 19th century, and just another 123 years to double to two billion. Since then, it has taken less than 100 years to quadruple to eight billion. Human population growth has accelerated. The quantum of money and total global liquidity have also continued to expand, just like the US fiscal balance sheet and monetary base. All systems involving nature and humankind – the laws of nature – have always had an inherently inflationary and expansionary nature. The continued growth in companies' sales and earnings is driven by the ever-increasing number of people who use their goods and services, plus the inflationary nature of price, money and economic systems. Hence, it is no wonder that markets rise over the long term. What happens when markets reach new highs Many investors think the laws of physics apply to financial markets too; the common adage is 'what goes up, must come down'. When asked what happens after the market reaches a new historical all-time high, many believe the market will fall thereafter. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up At first, it seems logical. Especially with words like 'all-time high', the human brain is conditioned towards mean reversion and to believe the next move is down, as we apply the laws of gravity to financial markets. But the historical and empirical evidence and a more scientific approach backed by data tell us that the wrong laws of nature are being applied. This, in turn, causes us to make the wrong decisions based on unproven evidence or wrong assumptions, and hinders us from achieving good or better outcomes. For the popular S&P 500 index, which also has one of the longest historical track records, the historical data gives a very strong and consistent message. That is, that the index, after reaching a new high, will go on to mark another all-time high due to the long-term direction of markets. Markets fall but don't stay down Another common mistake is to confuse the fall in markets during the course of the year with the full-year returns. We often mistakenly believe that market falls or volatility in periods of uncertainty is permanent, and we worry about the prospect of more downside. But historical evidence suggests time and again that the right strategy in a market correction is to buy more, not sell. In the past 15 years and even including 2025 year to date, the S&P 500 fell by 2.6 per cent in 2017 and by a whopping 33.8 per cent in 2020 during Covid-19. But subsequently, not only has it generated a positive return of 16.4 per cent for the full year in 2020, it has also averaged an annual return of more than 15 per cent during that 15-year period. Even in 2025, the index has registered a peak-to-trough fall of 18.8 per cent. But the S&P 500 stands at a new historic high and has generated a positive return of 7.5 per cent for the year. The market showed a small negative return in 2018 and a bigger fall in 2022. But 14 out of 16 years (including 2025) are positive despite the often double-digit falls in the course of the year. Yes, markets fall at some point – but they do not stay down. Why US dollar weakness and Sing dollar strength are nothing new Now that we have ascertained that new record highs and falling markets in the short term are not something to be worried about, but are the norm, how do we go about investing? Should we worry about the tariff wars and geopolitical extreme events such as wars? What about the concerns over the rising risk of stagflation in the US, even as China struggles to get its engine of growth going again? If we have learned anything from financial market history, it is that geopolitics or local politics rarely have a lasting impact on markets. Furthermore, even economic growth, while relevant, often does not directly correlate with markets because it is a very lagging indicator with inaccurate data. Instead, markets are driven by the underlying fundamentals of listed companies. The asset class on which tariff wars and geopolitics do have a meaningful and lasting impact is currencies. The protectionist and isolationist policies of the US have raised long term-concerns over its hegemony in the global context. Furthermore, the burden of the US' growing fiscal deficits and government debt has led to bond vigilantes to cause long-term Treasury yields to rise. Thus, the US dollar has been hit hard as investors scramble to diversify their risk. However, as is often the case, expectations of the demise of the US stock market, the US economic resilience and the position of the US dollar is premature. The US' dominance in global stock markets and other financial markets and trade means the US dollar is unlikely to be overtaken as the pre-eminent global currency in the near term. However, we must be aware of the risks in the long term posed by of structural problems that must be addressed, and weigh that against the possibility of a rebound in the short term. Singapore-based investors should always look at market returns in Singapore dollars and minimise the currency risk as their future liabilities are also in Sing dollars. Samuel Rhee is co-founder and chairman, and Hugh Chung is chief investment officer at Endowus, a digital wealth platform with more than S$10 billion in client assets across public, private markets and pension (CPF and SRS)
Business Times
2 hours ago
- Business Times
The great revival of Europe's industrials
'WE KNOW we need to do more… Europe needs to grow up and Europe needs to be able to defend itself,' said Friedrich Merz, Chancellor of Germany, in March this year. At that time, he unveiled a plan that would unlock hundreds of billions of euros for infrastructure and defence investments, breaking the prior tight controls on Germany's borrowing limit. He was planning a 500 billion euro (S$749.9 billion) infrastructure fund to invest in areas such as transportation, energy grids and digital infrastructure. This has now been approved by the German government, to be spent over 12 years. The sum is about 1 per cent of the country's gross domestic product per year. Merz also drove through a constitutional amendment to exempt defence spending that exceeds 1 per cent of Germany's GDP from the 'debt brake', a fiscal rule limiting budget deficits to 0.35 per cent of annual GDP. This means Germany's defence spending is now virtually uncapped. In addition, German states, which had been prohibited from taking on new debt, will be allowed to incur new annual debt of 0.35 per cent of GDP, the same as the federal government. In sum, we expect that Germany's fiscal boost could lift annual GDP growth by as much as 2 percentage points over the coming decade. Since Germany accounts for a quarter of the euro area economy, this alone translates into a 0.3 to 0.5 per cent lift to annual euro area growth. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In addition, for the wider European Union (EU), the European Commission has unveiled the 'ReArm Europe' plan. This would activate a mechanism to allow countries to use their national budgets to spend an additional 800 billion euros on defence by 2030, without triggering EU budgetary penalties. Given other EU countries have a lower debt capacity than Germany, the implementation of this plan could face more hurdles. Direct and indirect beneficiaries Not all the German and European defence spending will benefit Europe. Indeed, the European Commission estimates that nearly 80 per cent of defence purchases made by EU countries since the start of the Ukraine war were from outside the EU, with over 60 per cent from the US alone. With US tariff negotiations in the background, more defence purchases by the EU from the US could be part of a trade deal. European leaders recognise, however, the need for a massive industrial production ramp-up within Europe itself to be truly capable of defending the region. The aerospace and defence industry in Europe, which comprises 26 per cent of the MSCI Europe industrials sector, would be a direct beneficiary of this increased defence spending. We expect other segments of the industrials sector – such as electrical equipment, machinery, building products and construction and engineering – to also benefit from greater infrastructure and defence spending. In total, over two-thirds of the industrials sector would benefit directly from Europe's fiscal boost, while remaining sectors would benefit indirectly from the broader uplift in economic growth. Sustained earnings momentum The industrials sector notched up a good Q1 earnings season, delivering a 7 per cent positive earnings surprise. Consensus expectations are for earnings to grow by 10 per cent in 2025, and 12 per cent in 2026. With Europe's fiscal boost kicking in especially in 2026, we expect the multi-year tailwind to support earnings momentum for the industrials sector. We are also positive on other growth trends that benefit the sector, such as civil aerospace, electrification and sustainable construction. Civil aerospace benefits from strong global air travel demand. Electrification demand is growing from urbanisation, heavy AI investments with significant power demands and the increasing penetration of electric vehicles globally. Meanwhile, global sustainability trends are driving an upgrade to sustainable construction, energy efficiency and green buildings. Overcoming risks Valuation of the Europe industrials sector is currently elevated, with consensus 12-month forward price-earnings ratio at 20x, compared to the 10-year historical average of 18x. However, we expect the elevated valuation to be sustained by the strong earnings momentum. Another risk is that the sector currently generates 27 per cent of sales from the US, which could face tariff headwinds, subject to ongoing trade negotiations. A majority of sector revenue currently originates from outside Europe as well, so a stronger euro could translate into an earnings headwind. Nonetheless, we are bullish on the sector as we expect investors to be focused on the sustained earnings tailwind and a European industrials revival from greater infrastructure and defence spending. The writer is senior investment strategist at Standard Chartered Bank's wealth solution chief investment office
