Singapore 2010 brief outlook

Should history repeats itself, Singapore's stock market will undergo a major correction around June 2010 - 16 months after crisis began.  That is according to DBS Bank's analysts, who have noted that after the last two major recessions, the initial stock market rallies that followed lasted exactly 16 months each.

Mr Timothy Wong, managing director and head of group research at DBS, expects a bullish first quarter 2010, in which the Straits Times Index (STI) will hit about 3,080 points. But somewhere in the middle of the year, the markets will experience a sharp pullback.  If there is no major correction of 20 per cent or more in the first half of the year, there will "probably" be one in the second half.

The STI will likely rally again after the correction to finish the year at about 3,500 points for 2010, that is the likely indicator.....
Stocks in the services sector, including transportation, hospitality and high-end properties, which will be boosted by the opening of the integrated resorts in singapore this year.

Oil price has risen above US$80 per barrel and will more likely see those in the oil and gas sector businesses reaping some benefits.

The mood in the market now is optimistic rather than euphoric, but on the flip side, markets could be shaken by a sudden surge in inflation which already showing some sign.

MAS Singapore may return to the pre- recession stance of gradual Singdollar appreciation only in its following meeting in October, when inflation has picked up more significantly. A more expensive Singdollar helps to mitigate inflation here as it offsets the higher prices of imported goods.

As economic growth gathers steam and inflation returns, most of the other central banks in Asia will also start to raise rates this year.

For the property sector, the SIN Government is keeping a watchful eye on runaway prices in these sectors.

But high-end home prices will jump by 10 per cent to 15 per cent, due to more limited supply, the integrated resorts drawing in investors, and spillover demand from Hong Kong, where luxury home prices have skyrocketed. Similarly, luxury items will see some boost in demands in China,Hong Kong as well Singapore. Maybe getting into luxury car importer business is one good choice for some keen entrepreneur..