Investors hoping for a respite after PM Lee’s National Day Rally speech were sorely disappointed.

Instead, equities continued to slide across the board on a slew of negative data and news. Singapore’s non-oil domestic exports plunged 5.7% in July on slackening demand from US and Europe. Local exports for the year are expected to contract 2-4% and various economists have trimmed their 2008 GDP forecast.

Across the Pacific, credit fears continued to weigh heavily on the share price of Fannie Mae, Freddie Mac as well as other financial institutions. Rumours are rife that the US government might nationalise both mortgage giants should they fail to refinance US$223b of debts.

China, Asia’s growth engine appears headed for slower times as the ongoing financial malaise made its effect felt globally. A US$54b economic stimulus package is reportedly on the cards to keep the Chinese economy humming at a 10% growth rate in 2H08.

Amidst the slump in the local market, Shares Investment (S’pore) has continued pressing forward to uncover potential gems hidden in the bearish clouds. Specialising in the production of combed cotton yarns and loom-state fabrics, Zhongguo Pengjie Fabrics is well positioned to benefit from the rising consumer demand for high-end apparel in the PRC.

In spite of the recent easing of oil prices, oil futures continue to trade at historical highs, which is welcoming news for Sky China Petroleum Services, a niche player in reworking old wells at geographically challenging locations.

Qian Feng Fabric Tech, another Mainboard newcomer that is linked to PRC’s textile industry, completes our offering for this issue. With a healthy financial performance track record and tangible business expansion plans, the company should be worth a closer peek.