Bulls And Bears

STI sheds 3% on jitters over US-China trade war

Trump's new tariff threat unnerves market; bank stocks main drag on index

Investors in the region dashed for the exits yesterday as fears over the US-China trade war sent a jolt of panic through markets.

The shock from President Donald Trump's surprise tariff warning to China sent the Straits Times Index (STI) skidding 3 per cent or 101.67 points to 3,290.6.

It was only the third time in the past five years that the index has plunged by this level or more in a single session.

"The escalation of US-China trade talks at a late stage, when a trade deal was supposedly in its final stages, suggests that the spectre of a protracted trade war has not gone away yet," said Ms Selena Ling, head of treasury research and strategy at OCBC Bank.

Losers easily outnumbered gainers 369 to 100 on trade of 1.44 billion shares worth $1.49 billion.

Penny stock International Cement was far and away the most active of the day, with 99.3 million shares changing hands before it closed flat at four cents.

Next was Genting Singapore, down 2.06 per cent to 95 cents on turnover of 40.58 million shares.

Parliament heard yesterday that Genting's Resorts World Sentosa has set aside $1 billion to intensify the use of its existing site and to buy about one hectare of new land.

Yangzijiang Shipbuilding also saw heavy trading, retreating 2.56 per cent to $1.52 after 28.56 million shares changed hands.

It was reported yesterday that the shipbuilder has partnered Dajin Heavy Industry to build two bulk carriers for delivery in 2020.

Yangzijiang will be responsible for commercial work like applying for refund guarantees, and Dajin Heavy will handle the construction.

Waste management firm 800 Super rose 9.88 per cent to 89 cents on volume of 3.88 million shares. The Lee family that controls it has made a voluntary conditional offer of 90 cents in cash for each share in a bid to delist the company.

The offer price is a 17.6 per cent premium to 800 Super's weighted average price per share over the past 12 months.

Among STI counters, the bank stocks were the main drag.

United Overseas Bank dived 6.91 per cent to $25.85, DBS slid 4.33 per cent to $26.53, and OCBC Bank gave up 3.93 per cent to $11.49.

The plunge was due partly to the shares going ex-dividend. The ex-dividend date for UOB was May 6 for 70 cents, while the date for OCBC was May 3 for 23 cents. DBS has two ex-dividend dates this month, May 2 for 60 cents, and May 17 for 30 cents.

Ascendas Reit and Jardine Cycle & Carriage were the only STI counters to finish in the black.

A version of this article appeared in the print edition of The Straits Times on May 07, 2019, with the headline 'STI sheds 3% on jitters over US-China trade war'. Print Edition | Subscribe