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Markets Supported By Accomodative Policies

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US equity markets moved higher underpinned by the Federal Reserve meeting minutes which confirmed the central bank’s dovish stance without further rate hikes this year. However, before any concrete deal has been reached with China, the Trump administration declared a trade war on Europe threatening to impose new tariffs on US$11 billion of EU products from airplanes to agricultural products such as cheese and wine. Over the last two weeks, Dow Jones Industrial Average climbed 1.7 percent finishing at 26,143.05.

Meanwhile, China’s softening fiscal policies to stimulate the economy appeared to be gaining traction, as the country’s manufacturing sector returned to growth for the first time in four months. The Caixin/Markit Manufacturing Purchasing Managers’ Index in March 2019 rose to 50.8 into the expansionary region from 49.9 in February 2019. As a result, Shanghai Composite Index gained 3.2 percent to close at 3,188.63.

Brent crude oil price broke above US$70 a barrel on 5 April 2019 on the back of escalating civil tensions in Libya, sustained efforts by OPEC to cut production as well as US sanctions on Iran and Venezuela. Overall oil price had increased by almost 30 percent within the first quarter alone since the beginning of the year.

On the local bourse, OUE Group announced the proposed merger of OUE Commercial REIT (OUECR) and OUE Hospitality Trust (OUEHT) to create one of the largest diversified S-REITs with total assets up to $6.8 billion. The transaction will be effected by OUECR acquiring shares of OUEHT with a combination of cash and new units in OUECR. The enlarged REIT is expected to benefit from having an increased funding capacity, thereby enhancing its ability to deliver long-term growth through value accretive acquisitions and asset enhancement initiatives.

Last fortnight, Straits Time Index grew 3.7 percent to end at 3,331.98.

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