Banking stocks led a broad market slide last month that saw the Singapore equity market take a beating from fund outflows on fears of a US-China trade war.
The total market capitalisation of 738 listed companies on the Singapore Exchange stood at $947.3 billion as of June 29, down 3.4 per cent from $981 billion for 739 Singapore-listed companies as of May 31.
The three large-cap banking stocks all ended the month with their market capitalisation lower compared with May: DBS Group shed $4.51 billion; OCBC Bank, $3.77 billion; and United Overseas Bank (UOB), $2.07 billion.
Joining the three local banks among the biggest losers last month are large-cap real estate play CapitaLand and multi-business conglomerate Keppel Corporation.
KGI's head of research Joel Ng pointed to significant fund outflows from the Singapore equity market last month as the key contributor to the local stock market's lacklustre performance.
These were mainly triggered by "faster-than-expected Fed rate hikes" and "heightened concerns over the US-China trade war". Not helping, too, was "a significant devaluation of the Chinese yuan", Mr Ng said.
Last month also saw a major reshuffling of senior management roles at large-cap real estate groups such as CapitaLand, where group chief executive Lim Ming Yan announced he would retire on Dec 31.
Last Friday, it was announced that he retired as deputy chairman and non-executive, non-independent director of the real estate group's business units, including CapitaLand Retail China Trust Management and Ascott Residence Trust Management, yesterday.
Analysts generally agree that the recent selldown has more to do with negative externalities impacting Singapore's export-driven economy than business fundamentals.
DBS Group Research also highlighted the June school holidays and World Cup season as contributing to subdued trading activity on the stock market.
In its June 26 Market Focus, the research house argued that the selldown last month has opened up opportunities "to trade on a technical rebound" if and when global concerns ease.
DBS cited positive projections for earnings in support of its recommendation - analysts have forecast earnings growth of 16 per cent for this year and 9 per cent for next year.
But it also cautioned about any upside being limited in the near term, with market indices unlikely to return to January's peak.
OCBC Investment Research head Carmen Lee expects equity markets to remain volatile in the near term, especially if the US and China are still unable to reconcile their differences.
The United States is due to implement trade tariffs on Chinese products on Friday.
She suggested that investors can take advantage of current weakness in stock prices "to slowly accumulate quality blue chips including DBS, UOB, UOL and City Developments".
"The banks will likely continue to do well, especially with lower non-performing loan allowances this year and improving margins. Dividend yields are also healthy at 3.2-4.5%."
The Straits Times Index clawed back some losses towards the last week of June and closed at 3,268.70 points last Friday, up 11.13 points or 0.34 per cent.