STI declines 0.3% as investors take stock of US-China tariff truce

SINGAPORE - Local stocks finished lower on May 14, as investors took stock of the United States and China trade chatter.

The benchmark Straits Times Index (STI) declined 0.3 per cent or 10 points to 3,871.05.

Across the broader market, gainers beat losers 279 to 229, as 1.1 billion securities worth $1.3 billion changed hands.

Regional indexes ended mostly higher. Hong Kong’s Hang Seng Index climbed 2.3 per cent and South Korea’s Kospi advanced 1.2 per cent. The Bursa Malaysia Kuala Lumpur Composite Index gained 0.1 per cent. Conversely, Japan’s Nikkei 225 slid 0.1 per cent.

Back home, STI was topped by defence and technology group ST Engineering, which added 1.4 per cent or 10 cents to close at $7.19. It recouped some losses from May 13, when it was the STI’s biggest loser.

Chang beer maker Thai Beverage was at the bottom of the index, falling 3 per cent or 1.5 cents to 48 cents.

Local banking stocks largely fell. DBS Bank ticked slightly up by two cents to $44.25, while UOB declined 0.3 per cent or 10 cents to $35.27. OCBC Bank dropped 1 per cent or 17 cents to $16.18.

OCBC Investment Research’s equity research team expects short-term volatility in the local markets to remain, but “healthy fundamentals will continue to provide some support over the longer term”.

“Singapore banks should form a core part of a well-diversified portfolio as healthy yearly dividends and share buyback programmes should provide good price support – essentially in this environment of heightened trade and geopolitical tensions,” said the team in a note.

It added: “Singapore is in a significantly stronger position as stable domestic policies should ensure that should a tariff war resume, intra-regional trades and partnerships, and a more service-focused economy will help to cushion the impact from higher prices.”

THE BUSINESS TIMES