singapore stocks close lower on fresh fears regarding chinese economic growth 1186182015

Singapore shares fell amidst global bearishness after China released official figures that showed manufacturing during August contracted to a three-year low.

Investors also fretted about the forecast from Christine Lagarde, International Monetary Fund chief, that global growth this year would be much weaker than the previously anticipated 3.3 per cent.

Indices and sectors

The Straits Times Index (STI) ended 38.67 points or 1.32 per cent lower at 2,882.77, taking the year-to-date performance to -14.33 per cent.

The FTSE ST Mid Cap Index declined 1.70 per cent, while the FTSE ST Small Cap Index declined 1.48 per cent.

The Singapore Exchange traded a volume of 1,798.1 million shares valued at SG$1,113.71 million. Losers outnumbered gainers by 301/130.

Amongst the FTSE ST sectors, the big losers included utilities (-3.76 per cent), maritime (-2.68 per cent), basic materials (-2.47 per cent), China top index (-2.33 per cent), real estate holding and development (-2.12 per cent), and China (-2.06 per cent). Technology (+1.19 per cent) and CataList index (+0.17 per cent) were the only two gaining sectors.

Stocks

A study shows that whenever the Straits Times Index has been in an uptrend in the years before the elections, the ruling party appeared to lose its vote count in the elections, according to Business Times. Conversely, the incumbent party did better at the hustings if the stock market had been in a decline.

According to Business Times, private equity firm Shaw Kwei & Partners will make a voluntary conditional cash offer to acquire plastic components maker Chosen Holdings Limited (SGX:C10) at SG$0.24 per share, thereby valuing the company at about SG$68 million.

Ratings agency Standard and Poor’s has downgraded its outlook on STATS ChipPAC Ltd. (SGX:S24) from stable to negative, citing a weak industry environment in which the company will find it difficult to improve its key financial ratios over the next 12 months.

Chinese Global Investors Group Ltd (SGX:5CJ) closed 35.71 per cent higher at SG$0.0380 after the stock came out of a trading halt Tuesday. During the suspension of trading the company announced that net profit for the year ended June jumped 34.5 per cent to SG$2 million from SG$1.5 million in the prior period. The company also announced plans to sell its core waterproofing subsidiary for SG$3.28 million.

Economic news

The Canadian economy plunged into a recession for the first time since the financial crisis as a plunge in oil prices led to a curtailment in business investment and an economic contraction during the second quarter, said Channel News Asia.

China’s official manufacturing PMI for August printed at 49.7, much below last month’s reading of 50.0, and indicating a contraction in manufacturing activity. The data led to a significant sell-off across global stock markets as investors worried about the slowdown in the Chinese economy.

The much anticipated Singapore Savings Bond (SSB) will yield a compounded annual return of 2.63 per cent if held till maturity for 10 years, according to the Business Times. The bonds will pay interest every six months. The maiden issue of the SSB is for SG$1.2 billion, and according to the Monetary Authority of Singapore, allotments will be made so as to ensure the maximum number of successful applicants, and will be announced on September 28.

On Wall Street Tuesday, US stocks plunged 3 per cent following weak manufacturing data out of China as well as the global bearishness in stocks. The Dow Jones Industrial Average slumped 470 points, or 2.8 per cent, to 16,058, the S&P 500 declined 3 per cent to 1,914 and the Nasdaq Composite fell 2.9 per cent to 4,636.