[SINGAPORE] Singapore shares closed the first trading day of the week lower, as with most of the regional major indexes, as United States equity and bond futures slid in early Asia trading after the American government got its top credit rating downgraded a notch.
Singapore’s blue-chip barometer Straits Times Index (STI) dipped 0.6 per cent or 21.67 points to 3,876.2 points. Regional indexes were largely down – the Shanghai Composite Index was spared the rout with a flat performance, while the FTSE Bursa Malaysia KLCI closed 1 per cent down.
Gainers trailed decliners 212 to 298 across the broader market in Singapore, with 1.2 billion securities valued at S$1.2 billion having transacted.
Moody’s Ratings announced on Friday (May 16) evening that it was dropping the US’ credit rating to Aa1 from Aaa, due to the world’s largest economy’s ballooning budget deficit and elevated debt level.
Vasu Menon, managing director for investment strategy at OCBC, said past rating downgrades by credit agencies had a near-term impact on the markets, but no lasting consequences unless US Treasury yields rose sharply.
Concurring, Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Securities (Singapore), pointed out that the downgrade did not reveal anything new about mounting US credit and fiscal woes. Hence, while the resultant jolt may clip already tentative market optimism or buoyancy, it is unlikely to crush the broader recovery.
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“Not on account of Moody’s downgrade trigger, in any case,” he added.
Frasers Logistics & Commercial Trust (FLCT) closed at S$0.795 after the real estate investment trust went ex-dividend on Monday, 4.8 per cent or $0.04 lower – the absolute drop exceeding the S$0.03 in distribution per unit it is giving out for the period of October 2024 to March 2025.
At this price, it is within a whisker of hitting its 52-week low of S$0.79.
DBS also went ex-dividend, closing at S$44.30, dipping S$0.30 or 0.7 per cent, but the absolute decline was smaller than the S$0.75 per share in dividend it is paying out.
Closing lower as well were UOB and OCBC, which respectively slid S$0.20 or 0.6 per cent to S$35.30, and S$0.09 or 0.6 per cent to S$16.23.
