Singapore Market Monitor - Maybank Kim Eng 2017-03-24: Essential Bites – What We Learnt

Singapore Stock Market Market Sentiment Market Outlook

Singapore market monitor - Essential bites – what we learnt

In this report, we highlight some big-picture key messages from expert speakers at the conference that provide fodder for thought.
At the micro level, our interaction with the Singapore-based company attendees (and some from other ASEAN countries too) suggest a mood of cautious optimism as most expect a better year compared to 2016.

The key concerns echoed by a number of the attendees centre around margin pressure given the combination of higher competitive intensity and a bottoming of commodity prices that is likely to increase input costs.

The content from expert speakers at various plenary and industry track sessions point to a wave of change affecting many industry segments in the region.
Nationalistic agendas within parts of ASEAN are rising, driven by the anti-globalisation trends in the West - Indonesia was mentioned as potentially considering measures to safeguard domestic economy and employment.
The non-tariff stumbling blocks to ASEAN integration would likely rise in the auto, agri, metals and mining sectors.
On the flipside, the momentum for integration, while slow, was still positive in Thailand and Vietnam while Malaysia was singled out for making good progress in developing the digital economy.
On the trade front, US border tax has a high probability of being pushed through and, while RCEP would be positive, it would not accomplish what TPP possibly could have.
In manufacturing, with 3D printing costs falling rapidly, widespread adoption could be a significant cost deflator across the value chain.
In logistics, the highest growth is being witnessed in the perishables and pharma warehousing and transport space.
And with an estimated > 1% of total retail sales in the region from e-commerce, the potential for e-retail channel growth could be as high as 10-fold in the coming decade.

While it is a bit tricky to aggregate the outlook of the attendees as they were spread across a disparate range of sectors, we came away with the overall impression that companies were more optimistic about 2017 than last year.
Sound-bites include the belief that the government would not sell new hotel sites in the near term to manage the supply situation, credit spreads are tighter than a year ago despite rising SIBOR, business parks are seeing new demand from the back offices of banks and hope that the pick-up in economic data recently is sustainable.

The challenge to protect margins cropped up frequently driven by a number of underlying factors. These include the risk of increase in debt funding costs from rising rates, the anticipated increase in input costs from a bottoming of commodity prices and an increase in competitive intensity across sectors given the tepid demand growth of the past 12-18 months.

Continue Reading -> Singapore Market Monitor - Maybank Kim Eng 2017-03-24: Post-Conference Company Meeting Snippets

Neel Sinha Maybank Kim Eng | http://www.maybank-ke.com.sg/ 2017-03-24