Business

STI hits one-and-a-half year low

Index slides for fifth straight session to end at 3,109.91 as US-China tariff fight continues to deepen market woes

With no end in sight for the trade tensions that have dogged markets in the past weeks, several indices, including Singapore's Straits Times Index (STI) ended yesterday's trading at their lowest in more than a year.

Hong Kong's Hang Seng index ended at 26,422.55, reaching its lowest close since July 14 last year. China's Shanghai Composite Index closed at a 31-month low of 2,664.80 points.

The STI slid for a fifth straight session to end at 3,109.91, its lowest level in 11/2 years. It lost 11.01 points or 0.35 per cent from Monday's close of 3,120.92 and looks to be heading towards its next support level of around 3,080 points.

"We are staring at the same few factors driving regional markets lower," said IG market strategist Pan Jingyi. "The key item remains the worries over tariff escalations between the US and China, alongside the comparative disadvantage that Asia markets are expected to face in light of this threat."

Mr Hussein Sayed, chief market strategist at FXTM, said risks have not changed despite a slight return in appetite for equities.

"Emerging markets are still vulnerable to further shocks, and the US-China trade dispute is likely to escalate further in the coming days," he wrote.

"This makes it difficult for investors to make up their minds on whether to begin purchasing oversold potential stocks or wait longer for clarity on how US-China relations resolve."

Ms Pan said: "We are certainly getting technical indications of markets being oversold including the likes of the local STI. That said, the short term outlook ceases to look like alleviation could come any time soon for the current downtrend."

Turnover on the bourse was 1.5 billion shares, worth $865.6 million in total, as losers outnumbered gainers 249 to 138.

Among actively traded stocks, ThaiBev lost two cents or 3.2 per cent to close at 61 cents. Bloomberg said yesterday the company is marketing bonds for what would be the biggest corporate note sale in Thailand.

Citing people familiar with the matter, Bloomberg said the company is raising at least 70 billion baht (S$2.9 billion), in part to refinance loans taken to buy its stake in Saigon Beer Alcohol Beverage Corp.

Genting Singapore retreated one cent or 1 per cent to close at $1.02. A Bloomberg Intelligence report yesterday noted casino revenue growth in neighbouring countries is threatening Singapore's mass-market casino growth, though other initiatives in Singapore's tourism innovation push should soften the impact.

"Genting's Resorts World Sentosa is likely to be the first to feel the pressure from the Philippines' growing success, as mainstream gamblers account for about 80 per cent of its casino revenue," wrote Bloomberg analyst Margaret Huang. "Its mass-market orientation buoys its margins yet also causes it to lag behind rival Marina Bay Sands, whose iconic property and diverse attractions make it Singapore's leading casino and tourist destination."

Units of OUE Commercial Real Estate Investment Trust fell 0.5 cent or 0.75 per cent to 66 cents after an announcement that it would be buying the office components of OUE Downtown from its sponsor OUE. However, OUE's shares rose one cent or 0.6 per cent to $1.59 following the news.

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