Several countries were adopting expansionary monetary policies recently, starting with European Central Bank (ECB), followed on by Federal Reserve Board (Fed), Reserve Bank of India (RBI), Bank of Korea (BOK), and Bank of Japan (BOJ). They used monetary tools such as bond purchase and reducing bank reserve ratio to pump money into the banking system in the hope that these excess reserves in the banking system could be loaned out to businesses and consumers for spending. These major economies knew that the global economy is in no better shape this year compared with last year. That is why the pre-emptive actions to stimulate economic growth.
Singapore’s economy will be affected and my sense is that the Monetary Authority of Singapore (MAS) will loosen monetary policy in the October Review, just like the other nations. MAS will possibly allow Singapore dollar to weaken rather than gradual appreciation adopted in April review.
Just two days ago, I sold SembCorp Industries equity to lock a gain on the stock market. This counter was bought a year ago at $4.54. I sold it at $5.75. Considering that dividend was received at 17 cents per share during the period, the overall profit made on this counter over a one-year period was 29%. This was a good return. This way, I took some money off my equity portfolio.
Copyright © 2012, limkimtong for Living Investment
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