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Last Week in Numbers: Singapore Economic Growth Slower Than Expected

The Singapore economy grew by 2.2% in the third quarter, compared to the same period last year. The growth was slower than the 4.1% growth in the previous quarter and was below the government’s initial estimate and market expectation of 2.4%. However, the Ministry of Trade and Industry (MTI) maintained its full-year forecast for 2018 of between 3.0% and 3.5%.

MTI released its official 2019 forecast at 1.5 to 3.5%, slightly slower than the 2018 forecast. It said that the ongoing US-China trade conflict was partly to blame for the slower growth expected.

Meanwhile, non-oil exports in Singapore rose 8% in the third quarter compared to the corresponding period last year. The export growth was driven by non-electronic shipments, which grew for the fifth straight quarter but offset by lower electronic shipments. In total, trade rose 14.7% for the July-to-September period, marking an 8th consecutive quarter of growth. The improvement in trade has led Enterprise Singapore to raise its official 2018 forecast for trade and non-oil domestic exports to 9.0-9.5% and 5.5-6.0% respectively. Total services trade was up by 3.0% to S$120.2 billion in the third quarter this year.

Noble Group Limited (SGX: CGP) continues to be in the middle of controversy. After more than a year of restructuring negotiations, it now appears that the deal has run into trouble as Singapore authorities announced a multi-agency investigation into the commodity trader. The US$3.5 billion (S$4.8 billion) restructuring deal now hangs in the balance. The restructuring plan involves reducing its debt to creditors and giving some of its senior creditors around 70% of the equity in a restructured company.

Another major company that is shroud in controversy is China’s JD.com. Besides rising competition and the global trade war impacting the company’s business, JD.com founder also has to deal with a charge over rape allegations against him. Sales for the company’s third quarter was RMB104.8 billion compared to analysts’ estimates of RMB105.7 billion. More worryingly, annual active customers, a key performance indicator of e-commerce companies, dropped by 8.6 million in the third quarter to 305.2 million, the first decline since JD.com was listed in 2014.

Meanwhile, bitcoin dived to its lowest levels this year at around US$4,300. The digital currency lost more than 25% of its value this week alone. Mainstream investors have avoided bitcoin and other digital currencies due to limited regulatory oversight and undeveloped market infrastructure that could lead to price manipulations. According to Coinmarketcap.com, the total market cap of cryptocurrencies is around US$154 billion now, down more than 80% from its peak of US$800 billion in January.

Wall Street stocks made heavy losses on Monday and Tuesday. The Dow Jones Industrial Average fell 2.2% and is now in the red for the year. The broad-based S&P500 lost 1.8%, while the tech-heavy Nasdaq closed 1.7% down on Tuesday. Although the three indexes did regain some vigour later on in the week, investor sentiment continues to remain fragile amid the global trade war and higher interest rates.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of JD.com. Motley Fool Singapore writer Jeremy Chia doesn’t own shares in any companies mentioned.