Lacklustre earnings expected as economy slows

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Analysts are expecting gloomy figures when companies post their results, with many predicting that the cooling economy will affect their net earnings.

According to forecasts, profit increases may be less common than the previous year, and any increase would be muted at best.

“We expect fourth- quarter earnings to be unexciting, with a subdued growth rate, probably with a growth of around five percent year-on-year,” said Roger Tan, Research Chief Executive at SIAS.

“Economic conditions became more challenging in the second half of last year. I believe companies became more cautious in their expenditure after observing negative developments in Europe and weak growth in the United States.”

Several companies, including some real estate investment trusts (Reits), have already given an account of their earnings, indicating mixed results.

Investors will get a clearer picture of the situation when other companies reveal their scorecards in the coming weeks.

“This quarter will be a gauge of how corporations perform during uncertain times and how vulnerable they are to market volatility,” Tan noted.

Meanwhile, Keppel Land has already unveiled its earnings, and its quarter income surged 47 percent after it sold its stake in Ocean Financial Centre to K-Reit Asia. It also witnessed a fair value gain on investment properties.

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