singapore stocks continue to hemorrhage on regional cues and domestic slowdown 1087272015

Investors continued to stampede out of the Singapore Exchange in droves as apparent from the severely negative ratio of 418 declining stocks compared to just 83 gainers. The year-to-date loss on the Straits Times Index is now almost 11 per cent, and the index is now poised tantalisingly above the critical and psychological level of 3,000 after having taken a drubbing in four consecutive sessions. Bearish regional cues and an increasingly glum outlook on the domestic economy both weighed on investor sentiments.

Indices and sectors

The Straits Times Index (STI) ended 31.47 points or 1.03 per cent lower at 3,009.78, taking the year-to-date performance to -10.56 per cent.

The FTSE ST Mid Cap Index declined 1.19 per cent, while the FTSE ST Small Cap Index declined 2.54 per cent.

The Singapore Exchange traded a volume of 1,441.2 million shares valued at SG$1,241.7 million. Losers outnumbered gainers by 418/83.

Amongst the FTSE ST sectors, the big losers included utilities (-3.33 per cent), basic materials (-2.87 per cent), oil and gas (-2.48 per cent), CataList index (-2.39 per cent), technology (-1.81 per cent), healthcare (-1.57 per cent) and real estate holding and development (-1.51 per cent). The only gaining sector was maritime (+1.10 per cent).

Stocks

In what might be construed as a veiled reference to Noble Group Limited (SGX:N21), Singapore Exchange chief regulatory officer Tan Boon Gin said in his SGX regulator column yesterday that companies that suffer from critical research or short selling attacks should quickly assess the problem and respond effectively and completely so that shareholders have a complete picture and can make informed decisions.

"For a market to function well, bullish investors should be able to buy securities and go long, while bearish investors should have the ability to short-sell," he said, as quoted by Straits Times. "This supports market liquidity and efficient price discovery."

Newly listed jewellery company Soo Kee Group Ltd (SGX:42G) plunged 18.33 per cent (compared to its IPO issue price) to SG$0.245, suffering the worst trading debut on the Singapore Exchange this year, according to TODAY. The stock ended at its lowest point for the day after trading nearly 34 million shares.

According to the Straits Times, which quoted Bloomberg, the Noble Group Limited (SGX:N21) is considering the use of secured finance, which places commodity inventories as collateral for debt, to boost its liquidity and reassure the market. In another positive development, Fitch Ratings said yesterday that the company’s second-quarter results reflected financial stability even though its debt climbed higher because of an expansion in working capital. The flipside of that, however, is that the company will enjoy stronger generation of operating cash flow in the second half of the year.

Pacific Andes Resources Development Ltd (SGX:P11) announced late on Thursday night that the company and its subsidiary, China Fishery Group, were being investigated by the Monetary Authority of Singapore and the Commercial Affairs Department, which investigates white-collar crime, for an offence under the Securities and Futures Act, as reported by Business Times.

Chinese shipping firm JES International Holdings Limited (SGX:EG0) said Thursday that it had ceased operations and was retaining only a skeletal staff as a means to cut costs, according to Business Times.

Economic news

In an interview with TODAY earlier this week, Manpower Minister Lim Swee Say said that though the media is pre-occupied with such as foreign labor and the government’s call for increased productivity, Singapore is actually grappling with the more critical challenge of moderating growth. The economy is at a critical juncture, he said, and must choose a way forward that is less manpower-dependent, creates better quality jobs and ensures the development of a strong pipeline of Singaporeans that is able to take up core responsibilities in all major sectors. In the medium to long-term, the government has the firm goal of maintaining the 2:1 ratio of Singapore workers to foreign employee, Mr. Lim said.

A survey by the Monetary Authority of Singapore showed that total assets managed by Singapore-based asset managers jumped 30 per cent year-on-year to SG$2.4 trillion as at the end of 2014, according to Channel News Asia. The island republic benefited from higher fund inflows from growing Asian economies and its lucrative status as a pan Asia asset management hub.

On Wall Street Thursday, stocks suffered a broad sell-off under the weight of tumbling oil prices and another decline in Chinese equity markets, both triggering fears regarding slowing global economic growth. The Dow Jones industrial average fell 358.04 points, or 2.06 per cent, to 16,990.69, the S&P 500 lost 43.88 points, or 2.11 per cent, to 2,035.73 and the Nasdaq Composite dropped 141.56 points, or 2.82 per cent, to 4,877.49.