Are valuations justified by the growth outlook?

LAST Monday's column suggested the Straits Times Index was likely to remain stuck within a trading range that loosely spanned the 3,200 level (or just below) up to around 3,280. For the most part this was the case, though the index finally managed to break out of this range on Friday after Global Logistic Properties (GLP) announced details of the takeover offer it has received. The subsequent surge in GLP's price added 21 points to the index, enabling it to close at 3,287.43.

This breakout might prompt technically-inclined observers to re-calibrate their charts while raising the upside resistance to 3,300, a level not seen since mid-2015.

This is entirely possible in the days ahead because support will come from a Wall Street that now thinks there's only roughly a 50-50 chance of a third interest rate hike for 2017 in December and that the US economy could find itself in a "Goldilocks" position - that is, not too hot, not too cold.