Singapore shares slide in tandem with regional bourses and Wall Street; STI drops 0.1%

[SINGAPORE] Asian bourses, including Singapore’s, were largely in the red on Thursday (May 22) after a Wall Street sell-off overnight.

This came as the US’ fiscal uncertainty soured market sentiment.

Singapore’s Straits Times Index (STI) slid 2.46 points or 0.1 per cent to 3,880.09 points, which was relatively muted when compared with its regional peers’ declines ranging from 0.2 to 1.2 per cent. The exception was Jakarta Composite Index, which bucked the trend to close up 0.3 per cent.

Liechtenstein-based private banking and asset management group LGT commented that the tepid demand for a US$16 billion of 20-year US bonds resulting in higher yields reflected investor concern over America’s rising debt and fiscal situation.

The Congress tax and spending bill – if passed and expected to raise the nation’s US$36.2 trillion debts – as well as the downgrade of the US sovereign credit rating from Moody’s last Friday put equity markets under pressure.

Stephen Innes, managing partner of SPI Asset Management, pointed out that the high yields make it more difficult to justify today’s stretched equity valuations, and the earlier rally fuelled by the tariff detente could be capped.

Decliners hammered gainers 288 to 178 across the broader Singapore market, with 1.1 billion securities valued at S$1.4 billion changing hands.

Singtel closed at a 52-week high of S$3.95 – up S$0.10 or 2.6 per cent – after the telco posted S$2.8 billion in net profit for the second half of the financial year ended March, and announced a shares repurchase of up to S$2 billion. The counter was also the most traded stock with a transaction volume of 52.3 million, and the top performing STI stock.

Meanwhile, Japan Foods shares hit a 52-week low at S$0.21, after sliding down S$0.01 or 4.6 per cent. The Catalist-listed restaurant player with Ajisen Ramen being its flagship brand had earlier flagged substantial red ink for the financial year ended March.