Nothing spectacular for this quarter as the headlines was dominated with Trump trade war spats with China and EU. Trump must be hoping that with America as the World No 2 economy, his trading partners will hesitate going head to head with him for fear of his threat of slapping more tariffs and harming their industry in the end. Well, so far, his "America First" tactics does not seem to work well. China has immediately retaliate with reciprocal measures of the same degree, but this time, taking aim at America soy industry and EU has drawn up their counter measures as well. Allies does not seem to have a meaning in Trump, as he proceed not to exempt Canada from the Aluminum and Steel tariffs. Canada, on their part, retaliates back. The previous tax cuts incentives that Trump announces not so long ago seems to have all evaporated as company and consumers faced rising cost. Companies has now begin to weigh their options to remain profitable and satisfy shareholders demands. Trumps "America First" policy now seems more like "America Alone" and backfiring him on all front. Stock market has been jittery this quarter. While America good economic results has risen the stock market in the first half of the quarter, but the concern of an all out trade war has been holding back investors, leading to a retreat in the second half. For this quarter, DJI ended at 24271, a rise of 168 points (+0.69%) compared to 1Q. For Singapore, STI ended 2Q at 3268, a decrease of 159 points (-4.63%) compared to 1Q. For Singapore, the huge drop was likely due to Singtel (8% weight on STI), whose share price has been dropping consistently in this 2Q probably for fear of how much their local business will erode when the 4th Telecom Company enters Singapore in the second half this year.
Looking ahead, I believe the market will still be dominated by trade news and how the event will run out. The first volley will go live on 1st July. The results from this event will likely affect the USA mid-election in November, where democrats will hope to turn the balance and not let republican have control of both houses.
For this quarter, I am quite on the sideline as I feel the downturn in the market is coming. Only 1 transaction is done as below:
Transaction 1: Bought in a batch of IREIT Global in June.
EU economy has been improving and that has driven up the demand for office space and rental. I believe that will be a positive for IREIT Global, given that they will finish the 4th and final payment back to the bank to lower their debt in this quarter. This is also part of my plan to increase the reit exposure in my portfolio. Recent share price has came down a little and I believe now is a good entry point.
That is all for now. See you all in Q3 2018 update and thank you for staying with me. =)
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