Tag Archives: General

Economists here revise forecasts upwards due to strong global data

THE ‘V’ is back in fashion, as a wave of optimism sweeps across those who monitor Singapore’s economy.

Research houses Morgan Stanley and United Overseas Bank are among those tipping that the economy will stage a V-shaped rebound from the depths of recession and not stagger along in an ‘L’ or a ‘U’.

The brokerages issued reports on Friday pushing up gross domestic product (GDP) forecasts for this year, with Morgan Stanley forecasting minus 3.5 per cent and UOB minus 3.3 per cent – both a good deal better than earlier tips of a 5per cent contraction.

And a week before that, Credit Suisse economists revised their forecast upwards for just a 2.4 per cent dip.

The bullishness comes as manufacturing and export data – critical components of the Singapore economy – seem to have not only turned the corner, but are firmly on the way up as the country latches on to the global upturn.

The upgrades come on the back of a survey of 21 private sector economists released at the beginning of the month that showed sentiment is quickly turning up among most forecasters. Continue reading →

They worry the high leverage in the system has not been reduced

Today is exactly one year to the day that United States investment bank Lehman Brothers collapsed, and for a majority of fund managers surveyed around the world, the financial crisis that failure sparked is not over yet.

Of the 153 largest institutional investors polled by business advisory firm FTI Consulting, 64 per cent felt that the crisis had not ended. Asian investors, including some from Singapore, were slightly more optimistic, with 62 per cent believing the crisis had some way to go.

British, US and Australian investors were the most pessimistic, with 73 per cent, 76 per cent and 80 per cent of investors respectively believing the crisis had not ended.

Commenting on the survey, FTI’s president and chief executive Jack Dunn said: ‘Anecdotal evidence gathered during the survey suggests that across the globe, investors were still concerned the amount of leverage in the system that caused the original problem has not been reduced.

‘The prevailing view was that there has been so much economic stimulus that markets cannot help but go up,’ he said. ‘The concern was what would happen when government money runs out.’

The paradox, said Mr Dunn, is that despite the negative outlook, global equity markets have rallied significantly in recent months. Continue reading →