Singapore Press Holdings Ltd. is now the worst performer on the MSCI Singapore Index, as shares hover at a 25-year low, after a strategy to diversify into real estate has so far failed to offset sagging earnings from its media business.
SINGAPORE: Singapore stocks declined, with the nation’s benchmark index entering a correction, as the investors assessed the prospects for global trade.
The Straits Times Index dropped as much as 1.2 percent to 3,246.92, taking its drop from the May 2 peak to 10. The gauge last suffered a protracted slump over a three-month period through Jan. 21, 2016, when it tumbled 18 percent.
Trade tensions between the U.S. and other economic behemoths and rising interest rates have jolted markets, along with worries over higher oil prices. Benchmark gauges in Malaysia, Vietnam and Thailand have already entered a correction,
and the Philippine Stock Exchange Index slid into a bear market territory last week, holding on to its title of Asia’s worst market this year.
“Singapore has been hit because it is a liquid market where foreigners can pull out enough volume and at a quick enough pace,” said Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte. Teo sees “significant headwinds” for the rest of the year from prospects of higher rates and trade war concerns.
Morgan Stanley strategist Jonathan Garner wrote that deteriorating economic backdrop amid Fed tightening, weaker liquidity in China, strengthening dollar and escalating trade tensions between U.S. and China, have led to significant downgrades in index targets across Asia.
Singapore has highest proportion of stocks in oversold territory in at least a year, data compiled by Bloomberg show.
For Jingyi Pan, market strategist at IG Asia Pte., share values will rebound once the risk-off sentiment subsides.
“The prices that we have are a steeper pullback than it should be. STI is a bit lower than what it should be, given the kind of growth momentum that we still see,” she said by phone. “Given that the reaction is a bit overdone, I’d say that rebound should come.” - Bloomberg
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