Bulls And Bears

US election weighs on Asian markets

Week ends on dour note for STI following Wall St sell-off, as it enters negative territory

Singapore shares fell, in line with most Asian markets yesterday, ending the week on a subdued note after a sell-off on Wall Street on Thursday.

The benchmark Straits Times Index dropped 12.68 points, or 0.45 per cent, to 2,816.26. The decline pushed the index into negative territory for the whole week - it finished the five trading days 0.52 per cent lower than last Friday.

Most Asian bourses also fell, with Hong Kong down 0.77 per cent, Shanghai slipping 0.26 per cent, Seoul sliding 0.23 per cent and Sydney edging down 0.22 per cent.

Tokyo was the exception, rising 0.63 per cent as a weaker yen cheered investors. A weaker Japanese currency would boost the earnings of Japanese exporters.

Analysts noted a level of uncertainty across global markets as the Nov 8 United States presidential election looms.

"Whatever the outcome of the vote, history has shown us that there is usually a...sharp sell-off in equities for a brief period of time when a new president comes in, and then the market returns to the status quo," wrote Mr Mark Burgess, the head of equities at Columbia Threadneedle Investments, in a note on Thursday. "However, what is potentially concerning is that markets and volatility do not... seem to be pricing in a Trump victory, which could be a risk if the unexpected were to happen."

Shares of SingPost surged 4.6 per cent or seven cents to $1.59 yesterday.

SingPost said on Thursday that it had obtained regulatory approval from the Infocomm and Media Development Authority for Alibaba's second investment of $187.1 million to raise its stake in the postal company to 14.4 per cent.

Alibaba's $86.2 million investment in SingPost's logistics subsidiary, Quantium Solutions International, was also completed on Thursday.

CIMB Research upgraded its call on SingPost to "add" from "hold", saying the latest developments "should boost logistics earnings growth in the medium term".

Sembcorp Industries gained five cents to $2.53, after reporting on Thursday that net profit for the three months ended Sept 30 fell 55.9 per cent from the same period a year earlier to $53.9 million.

OCBC Investment Research reiterated its call to "buy" Sembcorp shares, with analyst Low Pei Han saying that although the firm's marine business continues to be a risk for the group, "we like the long-term growth prospects of the utilities segment which has exposure to developing markets".

Commodity plays continued to be among the most hotly traded in the local market.

Among them, Noble Group fell 0.2 cent to 16.8 cents, Golden Agri-Resources was flat at 39.5 cents and Japfa added three cents to 83.5 cents.

A version of this article appeared in the print edition of The Straits Times on October 29, 2016, with the headline 'US election weighs on Asian markets'. Print Edition | Subscribe