Singapore shares fall amid rising US Treasury yields, STI down 0.8%

SINGAPORE - Shares in Singapore fell for a fourth straight session on Monday as US 10-year Treasury yields continued to hover near 5 per cent.

The Straits Times Index (STI) shed 0.8 per cent, or 23.33 points, to close at 3,053.36.

Across the broader market, losers beat gainers 269 to 124 after 1.14 billion securities worth $835.35 million changed hands.

Major regional indexes were also in the red, with both South Korea’s Kospi and Japan’s Nikkei 225 index shedding 0.8 per cent.

Hong Kong’s bourse was closed for the Chung Yeung Festival during which residents honour their ancestors.

SPI Asset Management managing partner Stephen Innes said investors may be concerned about the trajectory of US Treasury yields and its impact on equities. “As long-term real rates rise, stocks could struggle mightily,” he said.

“Higher real rates increase the discount rate applied to future cash flows, leading to lower present values for these cash flows and potentially affecting every asset class we price, except oil, which deals in the present.”

Mr Innes said it is not just the level of rates that matters but also the pace at which rates have risen, as rapid rate rises can disrupt various asset classes and market sentiment.

On the STI, Frasers Logistics & Commercial Trust was the top gainer, rising 1 per cent, or one cent, to $1.02.

Meanwhile, Seatrium was at the bottom of the table, shedding 4.3 per cent, or half a cent, to 11.2 cents.

The trio of banks also closed in the red on Monday.

DBS Bank closed down 0.2 per cent, or seven cents, at $33.01, while UOB dropped 0.5 per cent, or 14 cents, to $27.62 and OCBC Bank declined 0.6 per cent, or eight cents, to $12.71.

THE BUSINESS TIMES