STI cleared 3,100 level

The Straits Times Index (STI) crossed 3,100 points level for the first time in rolling one-year period yesterday. STI stood at 52-week high of 3,107.87. Interestingly, the 52-week low level happened exactly one year ago at 2,521.95.

Last year (2011) was a particularly bad year for Singapore equity. The index started at 3,190 and ended 2,646. This was a 17.0% drop in the span of one year. The year-to-date gain in the index for this year (2012) was 17.4%. This is just a catch-up to wipe out market decline in 2011. We are just about back to square one.

The next question is whether STI will rise further to make substantial gain over the two-year period before the end of this year?

Much depends on the Singapore economy for rest of the year and moving into 2013. Analysts were predicting a technical recession for the third quarter, meaning two consecutive quarters of GDP decline. On an overall basis, the year may still see a positive but low growth in GDP. As for 2013 forecast, the Ministry of Trade & Industry (MTI) may forecast growth rate higher than this year’s. Watch out for 12 October press release from MTI.

Copyright © 2012, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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