STI lose direction

Singapore Stock market continuously affected by USA Japan and China.

USA economic slow down. i.e. QE shall continue in short term. QE is easy to start but difficult to tail off. QE provide temporary boost in economy during bad time only. But it will not change fundamental. Once QE tail off. Economic will perform according to their fundamental. Before 2010, USA economy had to power up their war machines. And housing bubble provided the support. Now USA army are withdrawing from oversea. And military expenses may reduce. Can USA economy rise again after housing bubble bust ? I hope the answer is Yes....

Japan failed in their 1st round QE which was started in March 2001. They started their 2nd round of QE recently. But Japan Government debt is too high. Their tax revenue not enough to pay for increasing debt interest. Unless they could increase their tax revenue e.g. increase GST.

Japan interest rate is always near zero. Their M2 GDP ratio is 240% while USA is only 89.9%. Japanese have too much money supply  in Japan. In this case, QE will have little effect over  interest rate. QE may lower down exchange rate. If it happen, inflation increase. Material and energy cost will also increase. With increase in production cost, export price may not lower as much as expected. Therefore increase in export may not be too excited. When companies earning can't compensate the loss in exchange rate. Foreign investment will be reduced. Japanese companies will be motivated to invest oversea instead of Japan.

QE will not improve Japanese fundamental. Every round of QE will result in more government debt and it will be more difficult for the next round of QE. Unless Japanese could improve their economy fundamentals at the same time. This round of QE will only provide a short period of good time in the expenses of their next generation.

China is slow but steady. I will continue to invest on Chinese banks

Singapore market is slow and lose direction. REITs price are going down. We shall monitor closely and I shall start to buy if price discount for further 10% e.g. Cambridge if fall to 0.62. I will start to buy.