Bulls And Bears

Asian markets slide in spite of Wall St rebound

Investors fret over US interest rates, trade war and Trump's attacks on the Fed

Wall Street may have bounced back from huge sell-offs earlier last week but hopes that traders here might follow suit were soon dashed yesterday.

Fears of higher interest rates in the United States, lingering worries over the trade war and attacks by President Donald Trump on the Federal Reserve kept investors on edge.

"We can't say the shock is over," Rakuten Securities chief strategist Masayuki Kubota told Agence France-Presse.

Amid a regionwide slide, the benchmark Straits Times Index (STI) shed 23.2 points or 0.8 per cent to 3,045.97. Losers beat gainers 262 to 143 on turnover of 1.67 billion shares worth $1 billion.

The STI's main laggards included ComfortDelGro, which fell 3.2 per cent to $2.12; Venture Corp, down 2.4 per cent to $15.99; and YZJ Shipbuilding, similarly down, to $1.24.

Still, several brokerages are sanguine about ComfortDelGro, with most issuing a "buy" rating.

KGI Securities has recommended a target price of $2.72, while UOB Kay Hian has set $2.59.

KGI Securities believes there was an overreaction to the move by Indonesian ride-hailing Go-Jek to enter the Singapore market on its own and not with ComfortDelGro.

"We believe the entrance of Go-Jek... will not bring about the same level of competition as Uber and Grab's fight for market dominance, which was simply not sustainable.

"Therefore, we are of the view that (ComfortDelGro) presents an attractive entry point for a defensive business offering 5 per cent dividend yield."

Separately, consumer electronics manufacturer Hi-P International pared 8.7 per cent to 83.5 cents as it lowered its earning guidance for the second time this year.

DBS was the only bright spot on the bank front, inching up 0.2 per cent to $24.48. UOB lost 0.5 per cent to $25.18 and OCBC fell 0.8 per cent to $10.66.

Hotel Properties Limited added 3.3 per cent to $3.80. OCBC Investment Research has a fair value estimate of $4.74 on the counter, citing that a West Orchard redevelopment might be on the horizon.

Catalist-listed Asiatic Group jumped 20 per cent to 1.2 cents on news that it has inked a conditional share subscription deal that will give the buyer a 14.9 per cent stake.

In Asia, Japan's Topix shed 1.6 per cent to its lowest finish in almost seven months. Shanghai lost 1.5 per cent, while the Hang Seng in Hong Kong dropped 1.4 per cent. Korea's Kospi lost 0.8 per cent and Australian shares hit a six-month low.

A version of this article appeared in the print edition of The Straits Times on October 16, 2018, with the headline 'Asian markets slide in spite of Wall St rebound '. Print Edition | Subscribe