There are nine stocks in Singapore that are linked to China’s State Owned Enterprises (SOEs). They include COSCO Corporation (Singapore) (SGX: F83), China Merchants Holdings Pacific (SGX: C22) and China Aviation Oil (SGX: G92).
By and large, Chinese stocks have not been outstanding performers in Singapore. What’s more their future could now hinge on the outcome of China’s biggest annual political event – the National People’s Congress – this weekend. It has been reported that China is set to clear out its inefficient SOEs, which have been a drag on domestic economic growth.
Already 1.8 million workers in the coal and steel sectors will be laid off. But there is speculation that many more jobs could be on the line. A clean-up of the SOEs could be disruptive but it also could pave the way for more sustainable long-term growth in China.
Staying in the Middle Kingdom, further signs of a slowdown in the world’s second-largest economy could be laid bare, when it reports trade numbers for February. China said exports plunged 11.2% and imports tanked 18.8% in January, compared to a year ago. But Retail Sales could show a continued resilience of Chinese consumers.
Whilst China’s consumers remain confident, the same cannot be said of Japanese households. Consumer confidence in the Land of the Rising Sun has been lacklustre, at best. In January the reading fell to 42.5 implied a lack of confidence. But Bank of Japan Governor, Haruhiko Kuroda, recently said the central bank might take additional monetary easing measures in mid-March.
The European Central Bank doesn’t have to wait as long as that. It has an interests-rate decision next week, which could see yet another central bank adopt negative interest rates to address the worsening outlook for growth and inflation.
Singapore will report unemployment rate for the fourth quarter of 2015 next week. The initial estimate of 1.9% was lower than the previous quarter and below market expectations.
And finally, there will be a partial eclipse of the Sun on Wednesday 9 March in Singapore between 7:20am and 9:30am. Doomsters are already predicting a day of disaster. But don’t worry if you miss this one. There will be another on Boxing Day, 2019. A bit like bear markets, when you think about it.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.