The Straits Times Index or STI is the benchmark index of the Singapore market, and it has been an incredibly interesting one to watch over the past year. While we have seen brief moments of positivity, the index has been seeing declines for the most part. Unfortunately, recent news with regard to economic conditions in Singapore are a signal for more tough times to come. Today, we'll talk about why the STI has seen declines, the recent news that shows more hard times coming for the index, and how binary options traders can take advantage of the trends. So, let's get right to it…
Why The STI Has Been Struggling
As binary options traders, we know that markets are often dictated by the economic conditions in the regions they represent. This was seen clearly in the beginning of the year as Chinese economic conditions sent the global market on declines. In the case of the STI index, this is no difference. As the benchmark index of Singapore, the index is heavily dependent on the economic conditions in the region. Unfortunately, economic conditions in Singapore have left much to be desired for quite some time now. Because of this, corporations in the country simply aren't producing strong gains, and their stock prices are representative of the problem.
Recent News With Regard To The Singapore Economy May Send The Index Further Downward
The bottom line is that economic conditions in Singapore aren't great and don't seem to be getting any better. Recently, economic data surfaced with regard to the state of the region, and while it was good at a glance, overall, the data was negative. Here's what we saw…
- The Good – In the first quarter, Singapore's economy did expand. In fact, on a year over year basis, the economy in the country saw growth in the amount of 1.8%, which is actually very good.
- The Bad – While the fact that we saw quarter over quarter growth is incredibly positive news, not all the news that was released was positive. The truth is that quarter over quarter growth was only at 0.2%. This is a drastic slowdown from the 6.2% figure we saw in the last quarter. Unfortunately, a key part of the economy in Singapore, transport engineering and precision engineering contracted, spelling trouble for the outlook. In a statement, the Singapore Ministry of Trade and Industry had the following to offer….
“The global economic outlook has weakened since early 2016, with global growth for the year now expected to be broadly similar to that in 2015. In particular, the growth outlook for the advanced economies has deteriorated marginally…”
How Binary Options Traders Can Take Advantage Of The Trends
While the STI has seen declines for more than a year now, based on recent data out of Singapore, I'm not expecting to see a reversal any time soon. In fact, the index looks to be destined for more declines. With that said, there is a great opportunity here for binary options traders. After all, it's our job to spot trends and determine future movements. Not only is the STI trending down, that trend is likely to continue. As a result, binary options traders should be looking for strong put option opportunities in order to follow the trends down to the profits!
What Do You Think?
Where do you think the STI is headed moving forward and why? Let us know your opinion in the comments below!