Bears continue to rule S'pore market in June

Shop owners in Athens. Greek jitters proved to be short-lived as the STI rebounded yesterday, says analyst Liu Jinshu.
Shop owners in Athens. Greek jitters proved to be short-lived as the STI rebounded yesterday, says analyst Liu Jinshu.PHOTO: EUROPEAN PRESSPHOTO AGENCY

Market value of firms dips 2.9% as 479 lose value; STI trades below 3,400 all of month

THE bears that moved into the market in late May continued to dominate trade on the Singapore Exchange last month.

Selling pressure sent the market value of Singapore-listed firms down 2.9 per cent from the end of May to $965.3 billion as at the close of trade yesterday.

Year-on-year, the market ended the month just 0.1 per cent down from June 2014.

Overall, 479 companies lost value last month from May while 185 gained and 98 were unchanged.

Only one company, healthcare firm Singapore O&G, went public last month.

Blue chips were not spared either, with 23 of the 30 firms that make up the benchmark Straits Times Index shedding market value last month.

The STI traded below 3,400 points for the whole of the month, falling further from its peak in mid-April, when it crossed the 3,500 mark to a seven-year high.

The STI closed at 3,317 points yesterday, down 2.2 per cent from the 3,392-point close on May 29.

One dampener was the collapse in China A shares last month that spilled over to the Singapore bourse, said Phillip Futures investment analyst Howie Lee.

Before that, the novelty of the Chinese market bull run and a rally in Japanese stocks may have diverted investor attention from Singapore, he added.

Mr Ong Kian Lin, head of research at RHB Research, added that a fair number of clients such as regional funds have become more focused on North Asia, bypassing the Asean region. "The weakening of currencies among our neighbours, such as the ringgit and rupiah, also played a part," said Mr Ong.

Uncertainty over how a Greek exit from the euro zone might play out also dragged on throughout last month, although "Greek jitters proved to be short-lived, judging by the rebound in the STI yesterday", said Voyage Research analyst Liu Jinshu.

First-quarter earnings at Singapore firms did not excite investors either but Mr Liu believes the market has already priced in most of this as well as weak economic data, given the STI's steady slide since mid-April. "Therefore, this may be a good time for bargain-hunting," he added.

Even so, Mr Liu warned that the STI could shed another 2 per cent to 3 per cent from 3,300 before rebounding, given that it fell through the 3,300 psychological barrier on June 29.

A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'Bears continue to rule S'pore market in June'. Print Edition | Subscribe