This week we are focusing on activity in Asian markets. We will be highlighting changes in Singapore, and China, as well as looking at the impact of the recent missile strike in Syria on Asian markets, and stock prices further afield. The attack had some immediate effects on markets, however, most stocks seem to have re-stabilized.
It has been announced that the Singaporean government will increase spending on public infrastructure from SGD18.3 million to SGD30 million by 2020. This comes as they fell in the rankings of the World Economic Forum’s Global Competitiveness Report from number 2 (2012-2013) to number 5 (2014-2015). Projects will be carried out in the areas of land transport, air and sea transport, utilities, and healthcare with planned building of four new state hospitals between 2020 and 2030.
In the week ending April 2nd property prices rose 27% from the same time last year in 26 major Chinese cities. Leading this increase were Shanghai, with a rise of 72%, and Guangzhou with a rise of 77%. Moreover, 17 major property developers saw sales growth of 82% in March, similar to that of 91% in the January-February period (Source: Barrons).
The Effect of Air Strikes on the Markets
Last week saw the US fire dozens of missiles at a Syrian airfield, damaging infrastructure including the runway. The strike was carried out in retaliation to a chemical attack that occurred in a rebel-held area of Syria earlier. Several stocks have experienced increases and decreases as a result of the strike. US futures fell, with S&P 500 futures off 5 points and Dow Jones futures down by 44 points. Asian shares also experienced an initial drop before re-stabilizing.
However, not all markets saw drops. The Yen saw an increase against the Dollar, and commodities such as gold and oil saw a rise in prices. London spot gold prices were 1.3% higher recently while Brent crude futures rose more than 2% before levelling to a gain of 1.42% at $55.67 per barrel. US crude increased by 1.61% taking it to $52.53. The reason for increases in the prices of these goods is because investors switched over to them, moving out of riskier investments. In the case of oil the price rose due to investors’ concerns that supply might be disrupted by the military in the region. However, despite these fears, CNBC says that it is unlikely that oil supplies will be restricted by Syrian military forces as it would be equally disadvantageous for them.