Bulls And Bears

Familiar concerns weigh on Asian bourses

Worries over interest rates and trade hit markets, as relief over US poll outcome fades

Asian markets ended a choppy week on a down note yesterday as relief over the US midterm election outcome faded, while the usual concerns over interest rates and trade resurfaced.

DBS regional equity strategist Joanne Goh said a split Congress should not affect United States President Donald Trump's trade war agenda as it enjoys bipartisan support and is "increasingly viewed as a political and ideological conflict".

"Hence it would be unrealistic to expect any meaningful Sino-US trade deal at the G-20 summit in Argentina from Nov 30 to Dec 1."

US markets mostly slipped overnight after the Federal Open Market Committee's latest policy statement.

Mr Jameel Ahmad, FXTM's global head of currency strategy and market research, noted that the Fed's statement did not acknowledge the recent volatility in global markets, suggesting that it intends to continue with plans for another rate hike later this year.

Hong Kong's Hang Seng Index dived 2.39 per cent, Shanghai shares retreated 1.39 per cent and the Nikkei 225 in Tokyo shed 1.05 per cent. Shares in Australia and Malaysia also fell.

The Straits Times Index (STI) declined 15.27 points, or 0.49 per cent, to 3,077.97 - down 1.23 per cent for the week.

About 1.73 billion shares worth $1.03 billion changed hands with losers outpacing gainers 229 to 145.

Genting Singapore led gainers with 90.5 million shares traded after the casino operator posted a 46 per cent rise in third-quarter net profit. It gained 6.7 per cent to 95 cents.

Mapletree Logistics Trust rose 0.8 per cent to $1.22 following news on Thursday night that it plans to acquire a logistics centre in South Korea for 37.85 billion won (S$46.4 million). The acquisition is expected to be accretive, with an initial net property income yield of about 6.5 per cent.

Among the losers, Sats fell 4.5 per cent to $4.88 on the back of lower earnings posted on Thursday night.

DBS maintained its "buy" call on the stock, citing "positive long-term growth prospects" as core operating profit and profit before tax remained largely within expectations.

OCBC analyst Joseph Ng concurred on the positive outlook, "with aviation volumes and demand for safe, quality food set to increase", but downgraded his rating to "hold" on limited upside potential.

He noted that the share price has risen about 4 per cent versus the STI's 2 per cent since the bank upgraded Sats to "buy" in September.

A version of this article appeared in the print edition of The Straits Times on November 10, 2018, with the headline 'Familiar concerns weigh on Asian bourses'. Print Edition | Subscribe