Regional markets in the red over weak data, STI closes 1 point lower

Regional markets remained in the red on Oct 14, 2015, a day after China announced a 20.4 per cent year-on-year drop in September imports.
Regional markets remained in the red on Oct 14, 2015, a day after China announced a 20.4 per cent year-on-year drop in September imports.PHOTO: REUTERS

SINGAPORE - Regional markets remained in the red on Wednesday when more downbeat data emerged to deepen the concerns around growth outlook.

A day after China announced a 20.4 per cent year-on-year drop in September imports - which along with third quarter earnings woes pushed Dow Jones Industrial Index down by 0.29 per cent overnight - inflation for the month came in lower than expected.

HSBC Greater China economist Jing Li said in a note: "Prolonged weak inflation will not only weigh on firms' profits and add to their debt burdens, but also lead to poor market expectations regarding incomes and prices.

"This may further exacerbate deflationary pressures in the coming months. Therefore, we believe more decisive policy easing is needed to counter deflation risks. We forecast a 25 basis points rate cut and 150 basis points in reserve requirement ratio cuts for the rest of 2015."

Expectations for further easing did not help sentiments however, with Shanghai paring 0.94 per cent and Hong Kong losing 0.71 per cent. Tokyo also dropped, down by 1.88 per cent.

Singapore's benchmark Straits Times Index was down marginally, ending 0.96 points or 0.03 per cent lower at 2,983.92. It was another quiet session, with only S$782.6 million worth of shares changing hands across the entire market.

This came after advance growth estimates showed that Singapore's economy narrowly escaped a technical recession with a 0.1 per cent quarter-on-quarter growth in the third quarter. But as the Monetary Authority of Singapore announced a reduction in Singdollar's appreciation, the economy looks to be in a bad shape.

"We take the policy decision to suggest that the MAS believes that the growth outlook has deteriorated sufficiently to warrant a reduction in slope," Nomura said in a note yesterday.

Amid the uncertainties, Noble Group stood out as the top active counter yesterday, with over 62 million shares transacted. It was also among the gaining blue chip counters, up half cent or 1.06 per cent to 47.5 cents.

The embattled commodity firm again came under scrutiny in recent weeks amid media reports of several high profile departures. Chief executive Yusuf Alireza told the Straits Times on the sidelines of a Singapore Institute of Directors event that this was resulted from the company's move to reallocate capital from metal to the more profitable energy businesses.

Global Logistic Properties gained five cents or 2.22 per cent to $2.3. Singapore Technologies Engineering was also up 2.22 per cent or seven cents to $3.22, after announcing on Monday that its aerospace arm has won $410 million worth of contracts in the third quarter.

whwong@sph.com.sg