(Bloomberg) — Treasuries rose after Federal Reserve Chair Janet Yellen signaled that a change in the central bank’s guidance on interest rates won’t lock it into a timetable for raising borrowing costs.
Stocks to watch: S-Reits, Asian Pay Television Trust, Rex, SIIC Environment, Food Empire
24 Feb9:25 AM
INCOME-TAX and GST (Goods and Services Tax) concessions for Singapore’s real estate investment trusts (Reits) will be extended for five more years, but stamp-duty concessions for the purchase of local properties will be allowed to lapse after March this year, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Monday.
Most of the industry flagged these as positive moves to keep the Singapore Reit market competitive relative to its Asian counterparts, but said the removal of the stamp-duty concession will increase the costs of acquiring local assets. This may consequently slow their pace of acquisitions and cause yields to dip.
Mapletree Industrial Trust, Viva Industrial Trust, Mapletree Commercial Trust, Frasers Centrepoint Trust, CapitaMall Trust and CapitaCommercial Trust are among Reits with wholly local assets.
3:00 AM AWST
February 19, 2015
“Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time,” according to a record of the Jan. 27-28 Federal Open Market Committee meeting released on Wednesday in Washington.
The committee, while considering risks to be “nearly balanced,” pointed to a strengthening dollar, international flash points from Greece to Ukraine, and slow wage growth as weakening the case for the first rate rise since 2006.
The FOMC said after its last meeting it “can be patient” as it considers when to raise the benchmark interest rate, even as it described the labor market as “strong.” A report the following week showed payrolls rose more than forecast in January to cap the strongest three-month gain in 17 years.
Most officials expect to raise rates this year and are weighing encouraging news on growth and the labor market against too-low inflation to judge the correct moment for liftoff.
While the panel’s Jan. 28 statement received unanimous backing from voting members, the minutes showed diverging views over when the first increase may be appropriate.
“Some observed that, even with these risks taken into consideration, the federal funds rate may have already been kept at its lower bound for a sufficient length of time, and that it might be appropriate to begin policy firming in the near term,” the minutes said.
The argument for raising rates sooner has been bolstered by unexpected labor-market strength. Non-farm payrolls rose by more than 1 million jobs from November through January. The economy grew 2.4 percent in 2014, the most in four years.
At the same time, a plunge in oil prices has kept inflation on check. Consumer prices as measured by the Fed’s preferred gauge rose 0.7 percent in December from a year earlier, and the rate has lingered below the central bank’s 2 percent goal since March 2012.
Fed Chair Janet Yellen has said the committee will want to be “reasonably confident” before it raises rates that inflation will move back up toward 2 percent over time.
“Several participants saw the continuing weakness of core inflation measures as a concern,” the minutes said.
The minutes also noted that “tepid nominal wage growth, if continued, could become a significant restraining factor for household spending.”
FOMC members ackowledged that market-based measures of inflation expectations had declined in recent months.
“A number of participants emphasized that they would need to see either an increase in market-based measures of inflation compensation or evidence that continued low readings on these measures did not constitute grounds for concern,” the record of the meeting said.
A gauge of expectations for inflation starting five years from now, based on Treasury securities, dropped to as low as 1.75 percent last month, data compiled by the Fed show.
Policy makers also discussed risks to the global economy. In their last statement they added “international developments” to the list of issues they will take into account when determining when to raise rates, in addition to employment, inflation and financial markets.
Policy makers concluded that a number of developments “had likely reduced the risks to U.S. growth,” including foreign central banks adding accommodation. They said lower oil prices were “potentially exerting a stronger-than-anticipated positive effect” on global and U.S. growth.
Fed officials also identified potential risks. They expected the rising value of the dollar “to be a persistent source of restraint” on exports, and a few participants said the greenback may appreciate further.
China’s slowing economy was seen as a “factor restraining economic expansion in a number of countries,” the minutes show. Officials also cited continuing risks from “global disinflationary pressure,” tensions in the Middle East and Ukraine, and “financial uncertainty in Greece.”
The U.S. economy has been strengthening while other major economies have struggled. The European Central Bank, worried about outright deflation, last month announced a plan to purchase 1.1 trillion euros ($1.2 trillion) of bonds.
China, the world’s second-largest economy, also posted the slowest growth last year since 1990.
Fed officials are also monitoring Greece, where a new government could run out of money by March and be forced to choose between breaking election promises or abandoning the euro. The conflict between Ukraine and Russia is another source of concern to policy makers.
The FOMC is next scheduled to meet March 17-18.
To contact the editors responsible for this story: Chris Wellisz at firstname.lastname@example.orgAlister Bull
PUBLISHED ON FEB 18, 2015 9:10 AM
SINGAPORE (Reuters) – The Monetary Authority of Singapore (MAS) said it was reviewing a report by Iceberg Research that claimed commodity trading firm Noble Group used aggressive accounting to mislead investors.
“MAS will take appropriate action if there are breaches of the SFA,” it said in an email to Reuters, referring to the Securities & Futures Act.
Responding to the MAS move, Noble said in a statement to the Singapore Exchange later on Wednedsay morning that it “welcomes this development and will fully co-operate with, and fully support, the MAS investigation.”
The company, which is listed in Singapore but based in Hong Kong, has rejected Iceberg’s allegations made in a report posted online on Sunday.
With Brent oil hits above US$60 in this year, 2015, and the number of oil drilling rigs fell this week to it’s lowest since August 2011, we could see a slight reversal coming week. However, this might be just a short term rebound as market is still cautious of the Greece issue and long term oil price. Moreover, we are in the festive period now, whereby market will usually be slow.
Here are some counters we can look out for:
Oil closed up for a second straight week on Friday after another drop in the U.S. rig count, and Brent crude hit a 2015 high above $60 a barrel, but market skeptics cautioned the rally could fade because supplies keep coming. U.S. crude inventories have swelled to record highs of nearly 418 million barrels, government data showed last week.
Bloomberg – Greece and Germany Are Working Toward a Compromise http://www.bloomberg.com/news/articles/2015-02-12/greece-germany-said-to-offer-compromises-on-aid-terms