Top Stock Market Highlights of the Week: Singapore’s Core Inflation, Tourist Arrivals and 6-Month Treasury Bill

Welcome to this week’s edition of top stock market highlights.

Singapore’s core inflation

There is more good news for consumers who have had to endure the rising prices of goods and services.

Singapore’s core inflation for September fell to 3% year on year, continuing its downward trend after peaking at 5.5%, a 14-year high, in both January and February.

The reason for the drop was lower inflation for food, retail and other goods.

It was a welcome decline from August’s 3.4% and the last time core inflation was lower than 3% was back in March 2022 when it hit 2.9%.

Overall inflation, however, inched up to 4.1% year on year for September, slightly above the 4% chalked up in August.

The rise was attributed to higher private transport costs as Singapore’s Certificate of Entitlement (COE) hit new records.

The good news is that core inflation is projected to decline further in the coming months as imported costs stay low on a year-on-year basis.

The tightness in the labour market has also eased as pandemic restrictions were lifted across the region.

For 2023, core inflation is expected to average 4% while overall inflation should come in around 5%.

Next year should see a one-percentage-point rise in the GST push core inflation up, but 2024 should see core inflation hover between 2.5% and 3.5%.

Meanwhile, the strong Singapore dollar has also tempered the country’s import cost pressures.

An anticipated increase in COE quotes, along with the incoming supply of newly completed housing units, should bring overall inflation down even further.

Tourist arrivals in Singapore

The latest tourist numbers are in, and it looks like Singapore’s travel industry is recovering nicely post-pandemic.

Singapore Changi Airport handled 4.87 million passenger movements in September, just 11% shy of pre-COVID levels back in September 2019.

In the same month, the airport recorded 27,800 landings and take-offs, also 11% below pre-pandemic levels.

For the third quarter of 2023 (3Q 2023), Changi Airport witnessed 15.3 million passenger movements, with the top five markets being Australia, China, Indonesia, Malaysia, and Thailand.

China hopped into the top five only in 3Q 2023 because of the country’s two-month summer holiday in July and August.

In the same quarter, airfreight throughput totalled 451,000 tonnes and was down 4% year on year.

Changi Airport’s five cargo markets were Australia, China, Hong Kong, India, and the US.

One bright spot was India where air cargo traffic jumped 21% year on year.

The airport’s executive vice president for air hub and cargo development, Lim Ching Kiat, said that the group will continue working with airlines to reinstate more city links and strengthen capacity on existing routes.

Singapore Airlines Limited (SGX: C6L) has also announced that it will commence flights to Brussels in April 2024, bringing Changi Airport’s passenger city links to Europe to 16.

Singapore 6-month treasury bill

If you are looking for a good place to park your spare cash, listen up.

The latest tranche of Singapore’s 6-month Treasury Bill (T-Bill) has an interest rate of 3.95%.

This interest rate is higher than the previous issue where the cut-off yield came in at 3.87% but was still lower than the cut-off yield of 4.07% last month.

The total amount allotted was S$5.7 billion out of a total of S$11.5 billion of applications made.

The median yield for the applications was 3.77% with the average yield at around 3.6%.

The interest rate on T-Bills is rebounding as the US Federal Reserve looks committed to keeping interest rates higher for longer to combat inflation.

Back in December 2022, the interest rate on T-Bills hit a 30-year high of 4.4% but has since come down to between 3.7% to 3.8% since March this year.

Yields may not continue rising as expectations are for the US Central Bank to stop its hiking cycle and to maintain interest rates at the current level of between 5.25% to 5.5%.

However, the T-Bill interest rate is still very attractive for savers who can choose to park their money in a safe instrument with very low risk.

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Disclosure: Royston Yang does not own shares in any of the companies mentioned.

The post Top Stock Market Highlights of the Week: Singapore’s Core Inflation, Tourist Arrivals and 6-Month Treasury Bill appeared first on The Smart Investor.