Welcome to this week’s edition of top stock market highlights.
US Federal Reserve
Investors have been waiting with bated breath for the US Federal Reserve’s (“Fed’s”) final interest rate decision of 2024.
The announcement came within expectations, as the central bank reduced interest rates by a quarter of a percentage point (0.25%), making this the third consecutive cut this year.
The new benchmark interest rate now hovers between 4.25% and 4.5%.
However, the Fed scaled back on the number of interest-rate cuts it intends to make for 2025, halving it from four to just two.
Officials believe that inflation will continue to be a concern next year as policymakers project that core inflation will end 2025 at 2.5%.
This level is higher than the original 2.2% envisioned back in September and is also above the Fed’s target inflation of 2%.
Overall, the central bank believes that the US economy will remain on firm footing next year, thus allowing rates to stay higher for longer.
It also believes that inflation will only hit the target of 2% by 2027.
Several economists believe that the new Trump administration will enact policy changes that prove inflationary, with a slew of trade, tariff and immigration policies slated for implementation.
Fed chairman Jerome Powell is satisfied with how 2024 is ending as he contends with maintaining a delicate balance for interest rates.
The US economy stayed strong while the labour market is robust, and inflation has been trending down steadily, albeit still at levels higher than the Fed would like.
With this third interest rate cut, the total reduction this year has been a full percentage point.
International flight routes
Global travel platform OAG has released its annual Busiest Routes report which ranks the most popular flight routes based on their number of seats.
Singapore appears on three of the world’s busiest international flight routes.
The Kuala Lumpur-Singapore route came in at number four with a capacity up 10% year on year to 5.4 million seats.
Singapore appeared on two other popular routes – the Jakarta-Singapore and the Bangkok-Singapore routes, which ranked eighth and ninth, respectively.
The busiest air routes are defined as those with the largest volume of scheduled seats for 2024 and account for flights in both directions on all routes.
Coming in at the top is the Hong Kong-Taipei route with a seat volume of 6.8 million, up from third place in 2023.
Currently in third place is the Seoul-Tokyo route which saw sea volume jump 30% year on year, while the Bangkok-Hong Kong route popped up in the top 10 at number seven with a capacity increase of 29% year on year.
Asia-Pacific routes dominated the most popular routes in the world with the region claiming seven out of the top 10 spots.
Global market intelligence provider BMI has forecast that tourist arrivals in Asia are expected to recover to their pre-pandemic levels in 2025.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, won S$180 million in contracts for its Urban Solutions and Satcom (USS) division.
The blue-chip engineering group will provide its latest communication systems – Supervisory Control and Data Acquisition (SCADA) and AGIL Platform Screen Door (PSD) for Bangkok’s new 35.9 km metropolitan rapid transport (MRT) Orange Line.
The Orange Line will connect eastern and western Bangkok and is projected to serve more than 400,000 passengers daily when fully operational in 2030.
STE has a long-standing relationship with Bangkok’s metro projects, having delivered 23 smart metro projects since 2014.
The group has deployed a range of smart metro solutions that include communication systems, passenger information systems, and mobility payment solutions, among others.
The USS division will also provide over 500 sets of full-height PSDs and more than 160 sets of half-height PSDs for the Orange Line, which comprises 21 underground stations and seven elevated stations.
This project has commenced and is estimated to be completed by July 2030.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
