Dear readers, STI closed at 2,883 on 31 Dec 2015, down 14.3% year to date. As mentioned last week (see my market outlook here dated 28 Dec), STI is one of the worst performing developed markets, alongside with Greece. Furthermore, our SGD has weakened more than 6% against the USD. Thus, for funds whose base currency is denominated in USD, their returns are likely to be worse than 14% (assuming that they buy stocks which move in tandem with STI), after factoring the weakness in SGD. STI may face challenging times in 1H2016 On a fundamental basis, STI may face some challenging times in 1H2016 due to the following factors:

1. a) Corporate results may continue to see disappointments, leading to analysts slashing earnings estimates further;
2. b) Singapore’s economic data in 1H2016 may also disappoint judging from the recent spate of data;
3. c) Continued slowdown in China;
4. d) U....

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