The Week In Numbers: Now You See It, Now You Don’t

So now we know. After more guessing than a game of stone, paper, scissors, China has finally announced that its economic growth target for this year will be 7%. It is not quite as fast as last year’s growth target of 7.5% but quite respectable, nevertheless.

China also said the challenges this year could be more formidable than previous years. That said, it stressed that fiscal policy will remain proactive and money policy prudent. In other words it could, if necessary, increase government spending, and it might, if needed, pump more money into the economy.

The European Central Bank has said it is ready to start buying bonds next week. It plans to buy €60 billion a month until inflation shows signs of reaching 2%. That is expected to take until September 2016.

The ECB’s monetary-easing programme is remarkably similar to the scheme adopted by the US Federal Reserve. However, in the case of the US central back, it took six years for the Quantitative Easing plan to work. The ECB thinks it can do it in 18 months.

India’s central bank has cut interest rates by 1/4% to 7.5%. The country’s inflation rate, which has moderated on the back of lower oil prices, provided some wiggle room for the central to trim rates. Currently, Consumer Prices Inflation stands at 5.1% compared to more than double that a year ago.

The cut in the cost of borrowings sent India’s stock market benchmark index, the Sensex, to an all-time high of 30,000 points. The Lyxor UCITS ETF MSCI Index (SGX: G1N), which replicates the performance of the MSCI India Net Total index, gained 3% this week.

Now you see it, now you don’t. The tech-heavy Nasdaq index breached 5,000 points for the first time in 15 years on Monday. But it subsequently fell to 4,967 points by Wednesday. At the current level, Nasdaq companies are valued at around 30 times profits. By comparison, our Singapore market, as measured by the Straits Times Index (SGX: ^STI) is valued at a modest 14 times earnings.

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