Market Update
Despite the continued threat of an escalating trade war between the US and China in the first half of 2019 and rising geopolitical tension between the US and Iran, the US market still rallied by over 16% in the first half of 2019. The stock market rally however, belie the overall subdued global economic growth. Against this backdrop, the International Monetary Fund ("IMF") has lowered their 2019 forecast by 10 basis points to 3.2%.

The S&P 500 rallied 16.2% for the first half of 2019, making this the best first half for the US since 1997. The rally was helped partly by the de-escalation of trade tensions following the Group of 20 ("G20") meeting in June, and a signal from the US Federal Reserve that they will be looking to cut interest rates to stimulate growth. Last month, the US Commerce department reported that US economic growth slowed in the second quarter of 2019 as trade disputes and a global slowdown took their toll. In the second quarter, US GDP grew at 2.1%, lower than the 3.1% growth from the first quarter. Accordingly, the US Commerce department has pegged back growth expectations for 2019. The silver lining however, is that US employment numbers have remained resilient, adding 172,000 jobs a month on average this year vs. last year's average of 223,000, resulting in unemployment rate being at a low of 3.8%.

In Europe, the Eurozone economy entered into a slower growth trajectory with 2Q19 GDP at 0.2% vs. 0.4% from last year. The feeble economic backdrop is also hitting corporations in Europe, particularly carmakers, with downbeat statements recently from companies including Germany's Daimler and France's Renault. European Central Bank's ("ECB") President Mario Draghi pulled no punches when he said in a press meeting that the economic outlook is "getting worse and worse". In view of the persistently weak inflation and growth in the Eurozone, Mario Draghi has floated the possibility of further rate cuts to support the economy. In the second half of 2019, we think investor's will continue to monitor the ECB's policy decision to support growth.

In Japan, a quarterly report released by the Bank of Japan ("BOJ") on the outlook highlighted that risks to the economy were skewed to the downside due to increasing overseas uncertainty, the report also cut its inflation forecasts for the year. The BOJ has committed to keep interest rates at ultra low levels at least until the first quarter of 2020, and a line in its policy statement that it will ramp up stimulus without hesitation "if there is a chance the momentum for hitting its price target is lost". In our view, the strong language in their policy statements while intended to calm the financial markets, highlight the increasing risk the BOJ see in the economic outlook of Japan. The government has cut its fiscal 2019 real GDP growth forecast to 0.9% from 1.3% previously.

The world’s second largest economy, China is also experiencing a continued slowdown in it's economy as the economy continues to see the effects of a slowdown from the trade war with the US. In the second quarter of this year, China's Q2 GDP growth at 6.2% was the weakest in 27 years. The growth data marks a continued slowdown from Q1's GDP growth of 6.4%. Unlike the other developed economies however, China has stronger tools in it's arsenal to shore up the economy. Since 2018, China has already slashed the reserve requirement ratios six times to free up more funds for the economy. Beijing has relied largely on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly two trillion yuan (US$291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments aimed at boosting infrastructure construction. These moves however, appeared to have little effect in stemming the slow down, the latest Caixin/Markit factory Purchasing Manager's Index came in at 49.9 indicating a contraction in manufacturing activity.

Despite the turbulence facing the ASEAN economy, ASEAN has fared relatively well so far. In the first quarter of 2019, Indonesia, Malaysia  and Vietnam recorded 5.1%, 4.5%, and 6.8% growth respectively. Whether this growth can be sustained however, remains to be seen as global headwinds like the US-China trade war will continue to put a strain on developing economies. A study done by S. Rajaratnam School of International Studies found that while trade diversion effect (in which businesses relocate their manufacturing facilities and activities from China to other low cost countries) could benefit some ASEAN countries such as Vietnam and Cambodia, the overall uncertainty is still expected to weigh on the economies here.

Back at home, flash estimates by the Ministry of Trade and Industry pegged Singapore's economic growth by just 0.1% in the second quarter of this year, lowest in a decade, and worse than the 1.1% growth expected by economists. The latest figures showed weakness across key sectors, with all contracting from the first quarter of the year. Manufacturing shrank 6% from the previous quarter, while construction contracted by 7.6% and services by 1.5%. In view of the slowdown, the market is now anticipating a review and a possible downward revision of the 1.5% to 2.5% GDP growth forecast for the year as the ongoing macro uncertainties weigh on Singapore's economy.

Going forward, expectations are rising that the Singapore economy is going to enter into a technical recession. This is in line with the slowing growth rates seen in most of the major advanced economies owing to the impact of the ongoing trade conflicts between the US and its key trading partners. The manufacturing sector is likely to further wane against the backdrop of trade tensions that continues to worsen disruptions to supply chains. Likewise, the outward-oriented services sectors are likely to grow at a more moderate pace and stay resilient due to the lower demand from key advanced and regional economies. MAS also could potentially embark on a slight easing policy to support growth. In all, we think the Singapore economy may be projected to grow at 0.5% to 1%, slower than the 3.3% full year growth in 2018.

ISOTeam Ltd
Enhance, Create and Sustain
30 July 2019
ISOTeam Ltd. is an established and leading player in Singapore’s building maintenance and estate upgrading industry. The Group also offers a full range of services and solutions comprising specialist Coating & Painting (“C&P”) services as well as complementary niche services. Read more...


BRC Asia Limited
Market Leader in Steel Reinforcement
25 July 2019
BRC Asia is an established pioneer in prefabricated steel reinforcement. Since their incorporation in 1938, they have developed their expertise to become a leading steel reinforcement solutions provider in Singapore. Today, they have operations in Singapore,  Malaysia and China. Read more...


Hatten Land Limited
Integrated Property and Tourist Development Developer
22 May 2019
Hatten Land is a leading property developer in Malaysia of integrated residential, hotel and commercial developments. They were listed on the Catalist Board of Singapore Exchange on 28 February 2017 through a reverse takeover (“RTO”) of VGO Corp. Read more...

KTMG Limited
An experienced vertically integrated apparel manufacturer
28 June 2019
KTMG Limited engages primarily in the business of contract manufacturing of apparels, specialising in the manufacturing of nightwear, lounge wear, casual wear and plus sizes apparels in manufacturing facilities in Malaysia and Cambodia. The Group is currently expanding upstream into the knitting, dyeing, printing and finishing of fabric. Read more...


BRC Asia Limited
Market Leader in Steel Reinforcement
21 May 2019
BRC Asia is an established pioneer in prefabricated steel reinforcement. Since their incorporation in 1938, they have developed their expertise to become a leading steel reinforcement solutions provider in Singapore. Today, they have operations in Singapore,  Malaysia and China. Read more...


Choo Chiang Limited
The one-stop provider for electrical works
18 March 2019
Choo Chiang Holdings Ltd. has established itself as one of the leading retailer and distributor of electrical products and accessories in Singapore. With a retail presence of more than 20 years, it offers an extensive range of products from over 30 well established third-party brands, as well as from its own proprietary brands through its 10 retail branches which are strategically located across different parts of Singapore. In addition to the distribution business, the Group also supplements its income through the property investment segment. It currently holds 12 investment properties which are rented out for rental income. Read more...


ISOTeam Ltd
Enhance, Create and Sustain
21 February 2019
ISOTeam Ltd. is an established and leading player in Singapore’s building maintenance and estate upgrading industry. The Group also offers a full range of services and solutions comprising specialist Coating & Painting (“C&P”) services as well as complementary niche services. Read more...

Brain-Computer Interface

18 June 2019
In today’s digital age, smartphones have taken the world by storm. People do pretty much everything on their smartphones, like communication, shopping, play games and even banking, but all these are done with users hopping from one app to another. Progressively, the movement towards a one-stop solution that opens up several functions in a single click starts to become more appealing as people look for simplicity and ease of use. In China, this idea of combining the ability to communicate, shop online, order rides, read books, play games, get food delivery and pay for anything within a single, unified smartphone app started to take shape with the rise of the world’s first Super App – WeChat. Soon enough, a similar trend started to unfold in South East Asia as ride-hailing services Grab and GoJek further their Super App ambitions across the region and achieve their decacorns status (defined as fintechs valued above US$10 billion). Now, the world has started to take notice of this latest Asian’s innovation and many apps wonder if they can too become a Super App.
Read more...