When I read the newspapers this week, I noticed string of bad news. This may be due partly that I looked out for them when I read the news.
On Monday, General Electric, one of the most important bellwether companies in the US, reported a drop in profits of 20% for first quarter of 2008, seemingly affected by the slowdown in the US economy. This is quite uncharacteristic for the most admired company in US and was expected to weather the economic storm better than most companies.
On Tuesday, Singapore Press Holdings reported a dip in net profits of 6.3% in last quarter due mainly to loss from investment income. Singapore Exchange also reported a drop in profits of 17.1% in the third quarter from the second quarter. Both companies are affected by the on-going financial crisis and sky-high commodity prices.
On Wednesday, The Straits Times reported that the Singapore retail sales revenue fell 1.3% unexpectedly in February. Car sales declined 10.6% and food and beverage sales dived 21.8%. These are signs of loss of consumer confidence with the economy and hence consumers are tightening their belts.
Wachovia, the fourth-largest US bank, reported first quarter results swung from profit of US$2.3 billion a year ago (same quarter) to a loss of US$350 million.
How will this end? More bad news is certainly coming our way. This is unavoidable for a while until the current economic crisis blow over. The only hope for investors and consumers is that this will not be protracted. The investors must keep their cool in face of this onslaught of bad news and review their investment portfolio constantly.
Written on 4/17/2008 8:50 PM
Copyright © 2008, the author known as LKT in Singapore.
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