Even before the emergence of omicron, Singapore’s efforts to reinvigorating the economy with the re-opening of travel borders had been off to a slow start. Since announcing Vaccinated Travel Lanes (VTL) to Europe in November, and to more countries in Asia over the rest of month, the number of people using these VTLs are surprisingly few and well under the daily quota. So when it was reported yesterday that Moderna’s CEO said that existing Covid-19 vaccines will be less effective at tackling the omicron variant, Singapore’s re-opening plans took a bigger hit, while the STI fell to its lowest in two months.
Elsewhere, Chinese shares fell to fresh lows on the HSCEI after China continued their anti-monopoly crackdown in the car-hailing sector, extending the wipe-out in share price value on the Hong Kong stock market to US$1.7 trillion since February 2021.
Finally, the US took another step toward a potential rate hike following Jerome Powell’s overnight abandonment of the “transitory” term to describe the rising inflation in the US…
Singapore’s re-opening off to a slow start
Singapore’s re-opening of borders appears to be off to a slow start, with the cost of vaccinated travel lane flights, the price of Covid tests and the restrictions on daily life after arrival possibly putting people off travel to Singapore.
Some 20,510 travelers received approval to enter Singapore since the first travel lanes kicked off in early September through November 26, just 12.5% of the around 164,500 people theoretically allowed in under the nation’s daily quotas. That figure rises to 37,001 with the inclusion of Singaporean and PRs, but still only takes up 22.5% of the daily quota. (Bloomberg)
In the most recent data release, the number of airline seats offered on flights from Singapore was about 22% of pre-Covid levels for the week of November 22. SIA had said earlier this month it expects to be at just 43% of pre-Covid capacity by the end of December.
Macquarie has a new call warrant listed over SIA this morning.
China crackdown continues
Yesterday, the Hang Seng China Enterprises Index (HSCEI) which measures the performance of some of the biggest Hong Kong-listed Chinese stocks tumbled to a its lowest since May 2016, hurt by both concerns over the omicron as well as China’s continued regulatory crackdown this time in the in the car-hailing sector as well as the Macau gambling sector.. Meituan was amongst the biggest drags on the gauge, falling 2.9% to HK$238. Macquarie’s put warrant over Meituan increased 8.6% yesterday.
US to rate hike soon?
Finally, a day after US President Joe Biden assured Americans that there will be no lockdown following uncertainty over the transmission rate of omicron, US Fed Chairman Jerome Powell said that it was “probably a good time to retire that” transitory word that he had used to describe the rising inflation in the US.
With US unemployment rates back to their pre-pandemic lows and inflation rising, Jerome’s latest comments appears to suggest a further tightening, both in tapering of stimulus as well as a potential hike in interest rates.
After Powell’s remarks, money markets estimated a 50-50 chance that the Fed will hike as early as May, and they’re pricing in around 0.6% increases by the end of 2022.
The S&P500 had tumbled 1.9% overnight on Powell’s comments, which concluded the day’s sea of red globally on omicron and tightening worries.