THE STRAITS TIMES Index closed higher last Friday at 2,651 points, gaining momentum on news of a 3.5% gain in US GDP for the quarter to September, its first expansion since 2Q2008. The US joins Japan, China, Germany and France as the leading economies that have emerged from recession, pushing the greenback down against the euro, which rose to 1.48 US dollars. Shares on Wall Street rebounded strongly last Thursday, following the US growth report, with the Dow Jones Industrial Average chalking up 199.89 points to 9,962.58, marking its largest single-session jump since mid-July.

 

The STI declined 84 points last week since hitting a high of 2,716 points last Monday, after losses at the National Bank of Australia and shrinking profits at camera- maker Canon roused earnings concerns and put pressure on regional bourses. Nevertheless, consumer confidence in Singapore rose sharply as recovery from the economic crisis continues. The quarterly Asian Consumer Confidence Index has increased more strongly in Singapore — from 88 in 2Q2009 to 110 in 3Q2009 — than in Indonesia, Malaysia and Thailand. Meanwhile, total employment in Singapore rose for the first time this year, up 15,400 in 3Q2009, according to the Ministry of Manpower last Friday.

 

Buoyed by the US economy, oil prices have risen above US$80 a barrel, more than doubling since the start of the year but still below their all-time high of US$147 in July 2007. As prices return to economically feasible levels once again, rigbuilder Keppel Corp guided that it aimed to secure $2 billion in new orders next year, including contracts from Brazil’s Petrobras. Keppel’s order book has more than halved in the past year and it will soon deliver the first floating production storage and offloading vessel to BW Offshore for ope rations in the US Gulf of Mexico.

 

Fortunes in the shipping industry are less buoyant. Neptune Orient Lines, Asia’s third-largest container line, last Thursday posted a net loss of US$138.9 million ($194 million) in 3Q2009, versus a US$146 million loss in the previous quarter, despite a strong season for container shipping. Average container rates fell 29% y-o-y, while container volumes dropped 6% y-o-y as US and European consumers curbed spending on Asian-made goods and new vessels were delivered. CEO Ron Widdows predicts “significant losses” from 4Q2009 through at least 1H2010. Citigroup recommends a “buy” on the stock, however, with an expected recovery over the next two years, low expectations for the industry, NOL’s strong balance sheet and possible M&A activity driving shares up.

 

DnB Nor Markets, investment-banking arm of Norway’s largest financial-services group, DnB Nor ASA, will launch an equity research and securities sales team in Singapore at its inaugural Asian Investor Conference on Nov 4. The team specialises in the energy, offshore and maritime sectors.

 

A DBS Vickers note last Friday says to watch out for US economic data, which will be heavy this week, starting with the ISM Index and culminating with October’s employment data. Expect a choppy market in the short term as investors react to movements of the US dollar, notes the broker.

 

Meanwhile, blue-chip rig builder Sembcorp Marine and utilities stalwart Sembcorp Industries report 3Q2009 earnings on Nov 5 and 6, respectively.