top of page
Writer's pictureAda Tam Ying Ying

Market Update 5th - 10th May 2022

Updated: May 17, 2022

Last week was a short week but yet eventful with various interest rate hike announcements from various central banks around the world. As mentioned last week, the rising US dollar had hit its nearly 2 years high and this can be tracked back from the U.S. dollar index (USDX) which measure the value of the U.S. dollar relative to a basket of foreign currencies (that include the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc), to observe the rising trend of USD is really making a return.


Hence, investors need to know the logic behind the increase of interest rate will eventually cause the flow of money head back to the central banks, as the consumers and businesses need to pay more for borrowing money now, and in order to lower the borrowing cost of money that previously almost charged at zero... equity (e.g. Stock, Unit Trust, Bonds) will definitely a place that investors can quickly encash within a short period of time by selling the assets away. Therefore, the selling off in market last week, is not something unusual but rather with the current all-time high inflation under the slow or in fact stagnant economic growth, should have already push the world into stagflation.


As such, the selling off may be still far from over, as the US Federal Reserve had warned for more 50-point hikes to come though the 75 basis-point rise is “not something that the committee is actively considering" commented by the Fed Chair Powell last Wednesday.


I had tabulated the last week rate hikes in the following table. Investors need to take note of the rate hikes that should not be treated as a self-contained issue that affect only the United States, but rather it has become a global trend that countries need to follow suit to dodge away from the situation where money leaving for other countries that give out higher returns.


​Country

​Previous

Now

Australia

Reserve Bank of Australia

0.10%Raise interest rates by 25 basis points to 0.35%

Unit State

Federal Reserve

0.50%Raise interest rates by 50 basis points to a range of 0.75 - 1.0%

British

Bank of England

0.50%Raise interest rates by 50 basis points to a range of 0.75 - 1.0%

India

Reserve Bank of India

4%Raise interest rates by 40 basis points to 4.4%

Hong Kong

Hong Kong Monetary Authority

0.75%Raised interest rate by 50 basis points to 1.25%

Reference: Fed raises interest rates by 0.50%, largest move since 2000 The Federal Reserve is expected to raise interest rates by half a percentage point this afternoon, as the central bank's firefight with high inflation continues.

 

Other Focus:

(News-Abounding Week)

  • China-Backed John Lee chosen Hong Kong Leader in uncontested vote

  • Keppel O&M awarded FPSO integration contracts worth $250 mil

  • Grand Venture Technology reports net profit after tax of $3.6 mil, up 8.9%

  • F&N reports 17.9% lower earnings of $68.5 mil on higher raw material and energy costs

  • First Reit posts 1.5% rise in Q1 2022 DPU to 0.66 Singapore cents

  • Far East Orchard back in the black with Q1 net profit of S$2.6m

  • Dairy Farm International changes name to DFI Retail Group Holdings

  • New Sembcorp solar farm can power 4,700 4-room HDB flats

  • China EV maker Nio wins nod for secondary listing on SGX

  • Aims Apac Reit in 'exclusive due diligence' to acquire Sydney office property

  • NYSE owner ICE profit rises on high trading volume

  • Keong Hong warns of expected H1 net loss, blames virus-related business conditions

  • Shell posts record profit on high energy prices and trading boost

  • BMW profit beats estimates on strong demand for top-end cars

  • Lendlease Reit posts 99.9% occupancy; 313@somerset tenant sales close to 2020 levels

  • Sembcorp bags S$1.2 billion green loan for corporate needs, sustainability projects

  • F&N issues $140 mil worth of notes with 3% p.a. coupon

  • Keppel O&M signs agreements worth $135 mil for utilisation of two jackup rigs

  • ABSD of 35% to apply on transfer of residential property into a living trust

  • Ascendas REIT to acquire seven logistics properties in Chicago for $133.2 mil

  • Riverstone Holdings reports earnings of RM108.7 mil for the 1QFY2022, down 79.2%

  • Keppel DC REIT prices $109.9 mil worth of 2.61% notes due 2028


 

Coming Focus:


Sunday, May 8, 2022

​

USD

FOMC Member Speaks

CNY

Trade Balance (USD)

Monday, May 9, 2022

​

Holiday

Hong Kong, National Day

SGD

Foreign Reserves USD (MoM)

USD

FOMC Member Speaks

Tuesday, May 10, 2022

​

USD

FOMC Members Speak

USD

Fed Member Speaks

USD

EIA Short-Term Energy Outlook

CNY

CPI / PPI

Wednesday, May 11, 2022

​

USD

Core CPI

USD

Crude Oil Inventories

USD

Federal Budget Balance

Thursday, May 12, 2022

​

USD

OPEC Monthly Report

USD

Core PPI / PPI

USD

Initial Jobless Claims

USD

FOMC Members Speak

Friday, May 13, 2022

​

USD

Export Price Index

USD

Import Price Index

USD

Michigan Consumer Expectations

USD

FOMC Members Speak


 

News on Blockchain, NFTs and the Metaverse

When the interest rate is on the rise, not only stock market, unit trusts, bonds.... but the hot favourite, cryptocurrencies, are also not spared from the panic selling. Last week, bitcoin had ever jumped to $40,000 after Fed chair Powell ruled out of any bigger rate hikes. However, the good news was short-lived, and bitcoin is now hanging around at $30,000 psychological level, leaving the investors in fear of any possibility of further downside


As such, investors must note that the bitcoin, ether and digital assets are like any other assets, it doesn't isolate investors from the fragile global economies, given the fact that digital asset and traditional market correlations remain significant.


Reference:

Bitcoin’s price is now 50% down from its peak as the crypto plunge continues Bitcoin and other cryptocurrencies continued their tumble on Monday after a harsh weekend led to the lowest prices seen so far this year.


 

What to/not to invest this month (May 2022) :)

Markets had been performed badly for the past few days since the Federal Reserves had made the rate hike official in the FOMC meeting last week. In my past Market Update issue, I had mentioned several times about the month of May could probably a tough month for investors to ride through because 50 basis point is indeed too much for the market to digest and re-strategize portfolios will not be a option this time. Hence, a mass selling and buying should be expected for this quarter.


My call is be a short-term trader for this month. If it's happen that you bought any stock cheap enough, no harm to take profit if price rebounded. The volatility will always be there for you to get in and out of market. Else spread your buying over this quarter, no need to load up one shot in this volatile market.


Earning announcements continue...


 

CASH PLUS Promotion:

Low-commission trading account is available... and check out for Promotion Details

(Waived for US and HK Foreign Custody fee until 31 December 2022.)







 

Important Disclaimer

A. Reminders: 1. Phillip Securities Pte Ltd ("PSPL") will generally provide you "execution only" services - see Guide and Cautionary Notes for Trading Accounts on www.poems.com.sg. You are therefore personally responsible to make your own decisions on the suitability of every securities transaction you do through PSPL. One exception is if you specifically apply and pay for advice from PSPL. The other is referred to in reminder 2. 2. Execution-Related Advice ("ERA") on listed Excluded Investment Products may be given to you, but only subject to strict conditions. These include (a) you accepting personal responsibility to ensure any such advice is suitable before you act on it, and (b) you ensuring that you both receive and understand the rationale for every ERA given to you. 3. Materials (including market and analyst reports) are provided to you as information on an execution only basis for you to make your own suitability decisions. Materials which are not ERA are provided strictly as you asked. These reminders apply to the contents of this e-mail as well as any and all accompanying materials sent under its cover. B. General Disclaimer: The information/materials provided (whether as attachments to this e-mail or in its body), where they are not ERA on listed Excluded Investment Products in compliance with the second reminder above, are provided for general information/circulation only and not intended and therefore should not be taken as any offer or solicitation to do any investment or trade. No assessment has been made by PSPL as to the suitability for you of any materials in or under this e-mail. As always, the decision to trade and/or invest remains solely with you. Information/materials in or under this e-mail are provided as is without warranty of any kind, either express or implied. Such information/materials provided have been procured from sources which are believed to be reliable and accurate (but whose reliability and accuracy cannot be and are not warranted); and may have been acted on by PSPL or members of the PhillipCapital group of entities before being made available to you. All investments are subject to investment risks. Ideally you should and you may wish to seek advice from an independent financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned either in this e-mail or its attachment(s). If you choose not to do so, you are then choosing to make your own decision on whether any of the said investment product(s) are suitable for you. Neither PSPL nor any fellow member of the PhillipCapital group of entities shall, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. C. General Confidentiality Note: This e-mail and its attachment(s) are intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it.


Confidentiality Note

This e-mail and its attachment(s) are intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it.

26 views0 comments

Comments


bottom of page