Yen's strength sends shivers around region

Confidence in Abenomics dims, along with central banks' power to spur growth

Singapore shares managed to eke out modest gains yesterday against the broader gloom pervading regional markets.

The benchmark Straits Times Index (STI) climbed 0.92 point, or 0.03 per cent, to 2,809.24, reversing losses in late afternoon trade.

Equities elsewhere in Asia tumbled on the back of a stronger yen and amid growing concerns that central banks are losing firepower to spur growth in the global economy.

Tokyo slid 0.5 per cent while Seoul and Sydney both dipped 0.1 per cent. Shanghai bucked the trend to rise 1.6 per cent after Chinese data for March showed that inflation remained steady, which indicates the economy could be stabilising. This helped pull Hong Kong up by 0.4 per cent.

"Yen strength is really hurting at the moment," Mr Steve Brice, chief investment strategist at Standard Chartered Bank, told Bloomberg TV in Singapore.

"It's shaken a lot of people's confidence in Abenomics and the underlying thesis behind holding Japanese equities. The extent of the strength we've seen has surprised pretty much everybody."

At home, the local lenders were among the day's gainers, with DBS Group Holdings adding six cents or 0.4 per cent to $15.06 and United Overseas Bank edging up three cents or 0.2 per cent to $18.56.

OCBC Bank, which last week announced it is buying British bank Barclays' wealth and investment management businesses in Singapore and Hong Kong for US$320 million (S$430 million), advanced nine cents or 1 per cent to $8.87.

Property giant CapitaLand rose four cents or 1.3 per cent to $3.02, while Ascendas Reit increased four cents or 1.7 per cent to $2.42.

Singtel took a hit, falling five cents or 1.3 per cent to $3.66. Palm oil producer Golden Agri-Resources lost half a cent or 1.2 per cent to 40.5 cents.

Outside of the blue chips, Osim International added two cents or 1.5 per cent to $1.39. Founder Ron Sim, who plans to take the company private, upped his cash offer to $1.41 per share last Friday.

Postal and e-commerce group Singapore Post was flat at $1.585. The group on Friday said independent director Keith Tay has stepped down with immediate effect and will not seek re-appointment at the annual general meeting in July.

Sheng Siong Group rose one cent or 1.2 per cent to 85 cents. It has exercised an option to buy the first and second storeys of a commercial property in New Upper Changi Road for about $53 million.

Clinic operator Healthway Medical was the top active, surging 0.3 cent or 10 per cent to 3.3 cents on a volume of 144.4 million units. This was as a series of married deals of 127.7 million shares at three cents "sparked some speculative interest", said NetResearch Asia in a report.

A total of 1.11 billion shares worth just $760.3 million changed hands across the bourse.

A version of this article appeared in the print edition of The Straits Times on April 12, 2016, with the headline 'Yen's strength sends shivers around region'. Print Edition | Subscribe