singapore stocks end lower on friday on fed concerns 1360242015

Real estate investment trusts enjoy a bounce

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By :  ,  Financial Analyst

Singapore stocks ended lower Friday, as was the case for most other global equity bourses which ended in the negative after digesting the US Fed’s concerns with global growth and the central bank’s unexpectedly elaborate comments on the fallout from the Chinese slowdown.

The STI China sector was the top losing sector for the day.

Indices and sectors

The Straits Times Index (STI) ended 16.22 points or 0.56 per cent lower to 2,879.59, taking the year-to-date performance to -14.43 per cent.

The FTSE ST Mid Cap Index gained 0.52 per cent, while the FTSE ST Small Cap Index rose 1.37 per cent.

The Singapore Exchange traded a volume of 1,544.8 million shares valued at SG$1,899.9 million. Gainers outnumbered losers by 263/156.

Amongst the FTSE ST sectors, the gaining sectors included healthcare (+3.06 per cent), telecommunications (+2.04 per cent), CataList index (+1.06 per cent), oil and gas (+0.91 per cent) and real estate investment trusts (+0.50 per cent). Losing sectors included China (-1.52 per cent), real estate holding and development (-1.50 per cent), consumer goods (-1.29 per cent), utilities (-0.90 per cent) and consumer services (-0.78 per cent).


Frasers Centrepoint Ltd (SGX:TQ5) subsidiary Frasers property Australia Pty Ltd will get about AU$112 million (SG$112.4 million) on the divestment of a stake in an Australian logistics portfolio to Ascendas Real Estate Investment Trust (SGX:A17U), according to the Business Times.

Business Times announced separately that Ascendas Real Estate Investment Trust (SGX:A17U) had bought up a portfolio of 26 Australian logistics properties for AU$1.01 billion (SG$1.02 billion) – a move that will turn the REIT into the eighth largest industrial landlord in that country.

Singapore real estate investment trusts benefited from the decision of the US Fed to desist from raising interest rates. According to the Business Times, The FTSE ST Reits Index rose as much as 2.5 per cent on Friday morning, before closing at 694.15, up 0.5 per cent, substantially outperforming the STI, which fell 0.6 per cent to 2,879.59.

Silverlake Axis Ltd (SGX:5CP) gained 0.93 per cent to SG$0.545. The company said on Friday it had agreed to acquire local company SunGard Ambit (Singapore) Pte. Ltd. (previously known as System Access Limited) for SG$12 million, according to Deal Street Asia. Dr Raymond Kwong, Silverlake Axis chief executive and group managing director, said: “Through this acquisition, the combined and complementary multi-platform core, channels, card and payment solutions will enable us to deepen our customer solution implementation and support capabilities.” Holdings Ltd (SGX:5AM) surged 15.22 per cent to SG$0.265 on news that it might be targeted for a takeover by China’s Zhonghong Holding Co Ltd (SHE:000979), a Shenzhen listed company that already owns an 11.4 per cent stake in According to Deal Street Asia, a group of shareholders holding in aggregate a 51 per cent stake in the company had agreed to a cash offer for all their shares at 30 Singapore cents per share.

SHS Holdings Ltd (SGX:566) announced on Friday its decision to sell its refined petroleum distribution business for about SG$100.29 million, according to the Straits Times. According to SHS Holdings' group chief executive officer Henry Ng, the sale will “unlock value for the company’s shareholders and increase the overall financial capacity and flexibility of the group,” enabling it to focus on other strategic business units.

Economic news

The US Fed’s expressed concerns regarding global growth in China have added a new angle to Fed-watching. "Now that the Fed has explicitly acknowledged the external risks to its growth outlook, should the current China and market-related volatilities persist or escalate, the Fed will find it increasingly difficult to justify a move, and this may provide emerging markets with some temporary relief," OCBC Bank said in a note, according to the Business Times. In a Reuters poll, 12 out of 17 of Wall Street’s top banks now expect that the Fed will raise interest rates in December.

The volatile but upward trend in Singapore’s three-month swap offer rate is going to translate into heavier monthly instalments for home loan borrowers, according to the Business Times. The 3-month SOR jumped to 1.405 per cent on Aug 28, up 0.409 per cent from 0.996 on July 31, and further to 1.564 per cent on Sept 8 but thereafter has plunged to 1.284 per cent on Friday.

On Wall Street on Friday, stocks plunged after investors took note of the Fed’s warning on the global economic outlook. The Dow Jones Industrial Average lost 290.16 points (-1.74 per cent) to end at 16,384.58. The S&P 500 gave up 32.17 points (-1.62 per cent) to 1,958.03, and the NASDAQ composite fell 1.36 per cent to 4,827.23.

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