Singapore’s manufacturing activities rebounded in the month of August, suggested by PMI readings released last night.

The manufacturing PMI reading rose 0.3 points to 52.6, extending its 24th consecutive month of expansion. The electronics PMI reading also recorded strong uplift of 0.4 points to 52.0. The higher readings were attributed mainly to higher new orders and new exports. Both factory output and employment have expanded more whereas the inventory level recorded its lowest reading in over a year.

This suggests that the island country’s manufacturing sector exhibited resilience against the headwind of deteriorating trade environment as trade tensions escalated globally. Manufacturing contributes to about 20 percent of Singapore’s GDP. Robust readings is likely to lift sentiments in local stock market, with the benchmark index STI struggling to hold above key support level of 3,200 points.

The latest SGX statistics suggested that institutional investors net sold S$11.3 million of shares last week, versus net buy of S$51.3 million in the week before. They added telco and real estates (excluding REITs) and released consumer, industrial and REITs. OCBC, Singtel and UOB were among the top buys, whereas DBS, Keppel Corp and Thai Bev were the top sells.

The threat of new tariff on $200 billion Chinese goods overshadowed Asian market the past two weeks, sending equity indices down for a third consecutive day. Monday’s Caixin China Manufacturing PMI readings, which reflects the health of small and mid-sized enterprises, came to the lowest level in more than 12 months. Export order shrank for a fifth consecutive month and employers are undergoing retrenchment. This added on concerns over rising trade friction between China and US, prompting policymakers to come out with more stimulus plan to bolster domestic economy.

The official manufacturing PMI that came last week also saw export orders sliding, although its overall activity reading edged higher.

US markets will resume trading tonight after a Labour Day holiday. The direction of the US dollar is key to the Emerging Markets, which suffered from heavy outflow over the past few months. Investors also need to strike a right balance between soaring US equity prices and deteriorating trade relations with its major trade partners.

Singapore Manufacturing PMI

Source: SIPMM Academy

SGX weekly Institutional vs. Retail net flow

Source: SGX

By Margaret Yang in Singapore

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