What Happened In The World Of Finance Over The Past Week

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Let’s take a look at interesting developments over the past week in the world of finance that investors should take note of.

First, there is China looking to stabilise its capital markets in order to attract more stock market listings. Then, we’d move on to  Singapore’s Budget 2017 that was announced just last week.

China aims to stabilise capital markets and attract more IPO listings

Some investors may still remember the mid-2015 stock market meltdown in China that wiped out almost US$3 trillion of market value, according to CNBC. That episode, along with bouts of high volatility since then in the country’s stock market,  has led to a huge outflow of capital from the country.

However, the situation may be up for a change soon.

According to a recent Bloomberg news article, Liu Shiyu said over the weekend that the recovery of China’s capital market from the 2015 rout has been better than expected. He added that China is now ready for an “appropriately” larger flow of initial public offerings. Liu is the chairman of China’s securities and futures market regulator, the China Securities Regulatory Commission (CSRC).

To Liu, having more IPOs will be a good thing for China. In the aforementioned article, Bloomberg quoted him as saying: “The entry of new companies can increase market liquidity and can attract additional capital. As investment value increases, confidence of the entire society strengthens.”

The CSRC has been putting in place measures to attract more IPOs. For instance, it had sped up its IPO-approval process last year, a move Liu said has been “welcomed” by the market.

Looking ahead for the rest of the year, the regulator is making the stability of China’s capital markets a top priority. CRSC also revealed that China has plans to “gradually increase” the stakes that foreign companies hold in the country’s local securities and futures joint ventures.

Singapore Budget 2017

By now, many of you would likely have learnt about Singapore Budget 2017 which was announced on 20 February by Singapore’s Minister Of Finance, Heng Swee Keat.

There were a few unpopular initiatives in the budget speech, such as the 30% hike in water prices and higher motorcycle taxes. But it’s important to not overlook the bigger picture – how the budget can drive Singapore’s economic growth going forward.

Let’s take a look at how Singapore’s economy has fared on the whole and some of the announced-measures that the government hopes can make Singapore “an innovative and connected economy” in time to come.

In 2016, Singapore’s economy grew by 2.0% with uneven performances across different sectors. The better performing sectors were Manufacturing, Transportation & Storage, Information & Communications, and Other Services Industries; the quartet achieved growth of between 2.3% and 3.6% in 2016.

Meanwhile, the laggards were sectors such as Construction, Wholesale & Retail Trade, Finance & Insurance, and Buisness Services. This group saw growth rates of between -0.9% and 0.7%.

To help Singapore sustain economic growth over the long run, the government has announced measures such as:

  • Helping Singapore’s enterprises strengthen by offering  digitalisation and innovation programmes.
  • Setting up financing channels (such as the International Partnership Fund) to help local companies expand overseas.
  • Help Singaporeans upgrade their skillsets through programmes such as the Global Innovation Alliance and SkillsFuture Leadership Development Initiative. There will also be more short modular courses and e-learning opportunities for Singaporean workers.
  • Increasing the level of partnership between the government and the private sector through programmes such as the Industry Transformation Maps, a series of roadmaps for 23 industries to address issues within each of them. Other programmes include the Public Sector Construction Productivity Fund, which will allow the government to invest in innovative and production solutions in the construction industry and then help these solutions gain traction in the market.

There is a lot more to Singapore Budget 2017 – here’s a link to the Budget speech.

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