Bulls and Bears

STI finishes the week in sniffles, down 1.2%

Index's performance in line with losses among regional benchmark indices

The Singapore stock market continued its retreat yesterday , with the Straits Times Index (STI) down 17.65 points or 0.55 per cent to 3,181.03. This marks a 1.2 per cent decline over the course of the whole week.

About 1.62 billion shares worth $1.23 billion changed hands. Two stocks declined for every one that gained.

Among the biggest losers were Singapore Exchange (SGX), United Overseas Bank (UOB) and Hongkong Land.

Coming off a recent rally, which saw the stock gain 7 per cent over eight sessions to $9.39 on Wednesday, SGX yesterday lost 21 cents or 2.3 per cent to $9.05.

This was despite Jefferies raising its target price on SGX from $9 to $9.20 yesterday, citing market support for the bourse's acquisition of smart beta index provider Scientific Beta in its bid to scale up the index business and diversify revenue to counter competition from peers.

Still, the brokerage warned that "there may be over-optimism".

"Although the exchange is taking steps to expand its revenue streams, its long-term growth would depend on its ability to compete against larger index businesses and asset managers in an environment where fees are being compressed," it said.

The STI's performance was in line with losses among regional benchmark indices, led by South Korea. Benchmark indices in Japan, Hong Kong, Australia, India, Malaysia and Indonesia were also down.

Only China's Shenzhen Composite and Shanghai Composite rose 1.12 per cent and 0.31 per cent, respectively, after China's Ministry of Commerce said the resumption of work has been rapidly increasing in major foreign trade provinces such as Guangdong and Jiangsu.

Singapore banks were among the losers, despite positive financial results from UOB and OCBC Bank yesterday. This was due to uncertainty from the coronavirus outbreak, with the lenders expressing caution in the near term, as about a tenth of their total loan portfolio is exposed to vulnerable sectors such as tourism, retail and manufacturing.

Hongkong Land also fell 3.5 per cent to US$5.29, following its announcement of a purchase of a 23ha site in Shanghai for 31.1 billion yuan ($6.3 billion).

Sembcorp Industries fell 0.5 per cent to $2.01 after its dismal results showing. The conglomerate had sunk into the red with a net loss of $15 million for its fourth quarter ended Dec 31, dragged by lower revenue from its energy and marine segments. Revenue for the quarter also fell 10 per cent to $2.32 billion.

A version of this article appeared in the print edition of The Straits Times on February 22, 2020, with the headline 'STI finishes the week in sniffles, down 1.2%'. Print Edition | Subscribe