Singapore investors welcome the Year of the Rooster optimistically as the Straits Times Index ended trading yesterday at a four-year high of 2,140.16, rising about one percent in the half-day session.
In the real economy, however, things do not look so rosy. Singaporeans celebrating the Lunar New Year seem to have left their wallets behind.
Singapore's Chinatown sees more visitors but drop in sales
Chinatown is a lot more crowded this Lunar New Year season, compared to last year. Apart from a 10 percent rise in the number of stalls, an increase in public transportation services has also helped Chinatown attract 50 percent more visitors this year.
But, despite all that, some stalls say their businesses aren't doing as well, some even say sales have dropped as much as 40 percent... And despite having to slash prices by up to 50 percent so far, tonnes of goodies are still waiting to be cleared...
The bigger picture isn't much better.
Singaporean businesses cautious in outlook for Year of Rooster
In the lead-up to the Lunar New Year, some retailers are seeing roaring trade, but they are not popping the champagne just yet. In general, businesses are cautious in their outlook going into the Year of the Rooster, and that is because the economy is expected to moderate to a growth of 3 to 5 percent in 2005, after a strong 8.1 percent expansion last year...
While the mood is festive and the buying frenzied during the pre-Chinese New Year period, local retailers say this is only seasonal, and business throughout most of last year was a far cry from this... They say retail conditions are tough, with high operating expenses and slowing sales...
Meantime most manufacturers are in a no better mood, especially those in the electronics sector which is facing a global slowdown. This is expected to last for at least the first half of this year, but there are some bright spots - such as in transport engineering... Sentiment in the hospitality, banking and property sectors is also upbeat.
Given the overall cautious outlook - analysts do not expect investors to be pouring funds into the stock market... Still there may always be a surprise, as according to Chinese tradition, the rooster is a hard worker, and businesses may find inspiration to outdo expectations.
And that's probably what keeps some analysts cautiously optimistic for the Year of the Rooster.