The Straits Times Index advanced 16.23 points or 1.4%, during the week, closing last Friday at 2,790.29 points. Earlier in the day, Premier Wen Jiabao announced during his annual speech at the opening session of the National People’s Congress that China had set growth and inflation targets for 2010 at 8% and 3%, respectively. He also said China will slash bank lending this year by about a fifth but indicated no roll-back in the fiscal stimulus that spurred a rebound.

 

At the same time, a drop in the number of Americans filing for jobless benefits alluded to a stabilising economy. Experts expect the US unemployment rate to hover at 9.8%. A soft economic recovery marked by the high unemployment rate and tame inflation should allow the US Federal Reserve to keep interest rates low and fend off any tightening in US monetary policy, top US central bank officials said.

The tourism industry has begun to see signs of a sustainable recovery with 908,000 visitors arriving in Singapore in January, up 17.6% y-o-y, the third consecutive month that arrivals have grown. The opening of Marina Bay Sands on April 27 and Universal Studios Singapore in Resorts World at Sentosa on March 18 will provide an added boost to the industry.

 

“With the opening of the two resorts, we believe tourism will take centrestage in the economy’s next wave of growth,” say analysts at DMG & Partners. “The success stories of countries with similar service offerings reinforce our view that Singapore’s visitor growth will easily punch through the 15% to 20% level in the initial year of opening [possibly even 30%], with sustained 5% to 10% growth thereafter.” Visitors are also expected to extend their stay, leading to a 20% to 35% spike in visitor days in 2010.

 

The brokerage house expects hoteliers like CDL Hospitality Trusts and Amara Holdings to benefit from the influx of visitors to the Lion City, and has slapped “buy” recommendations on both stocks. It also has a “buy” call on Genting Singapore, believing recent share-price weakness to be a good opportunity to accumulate stocks in the casino operator.

 

Launch prices of new luxury residential projects in Singapore could appreciate a further 10% to 15% this year, after rising 20% to 25% last year, according to CB Richard Ellis. In January and February, 88 units at Urban Suites were sold at $2,500 psf on average and 35 units at The Laurels were sold at $2,500 to 2,900 psf. Both projects are in the Cairnhill area. Other luxury projects that will be marketed in 1H2010 include Ardmore 3, Nassim 8 and those on the sites of Grangeford and Parisian.

 

Meanwhile, data from Nielsen Media Research revealed that expenditure for display and classifieds grew by 26% y-o-y in January and 7.8% from September to January. However, shares of Singapore Press Holdings have yet to factor in the recovery, DBS Vickers believes. They expect more room for upside revision arising from the opening of Marina Bay Sands, a pick-up in employment and more property launches.

 

Local retail sales data is due for release on March 12.