Singapore share prices may trade firmer in the week ahead if the US Federal Reserve moves to cut interest rates as is widely expected, dealers said. Analysts are tipping the US central bank will cut key interest rates by half a percentage point to shore up the world's biggest economy which has been hit by the troubled subprime mortgage sector.
"The initial reaction to a rate cut will be positive," said Gerald Ambrose, managing director at Aberdeen Asset Management. "The pressure on Asia to raise rates is off and people will feel more comfortable buying property and equity."
In its last two meetings, the Federal Reserve has reduced the federal funds rate by a total of 75 basis points to 4.50 percent. The December 11 meeting is the US central bank's last meeting for 2007.