Fri, Sep 11, 2020 – 6:00 PM
SINGAPORE shares capped a rather broody week on a flat note. The key Straits Times index was down 2.0 points or 0.08 per cent at 2,490.09 on Friday, after a renewed rout in US mega-gap tech shares.
The market’s key barometer lost 0.8 per cent over the week on worries that the US tech bears, still at lofty valuations, could portend something deeper; for one, will the meltdown turn more broad-based and engulf other stocks and asset classes?
Dashed Covid-19 vaccine hopes, a key to jump-starting the global economic recovery, and a bearish oil market, plus the likelihood of a no-deal hard Brexit added to the uncertainty, curbing traders’ risk appetite.
Across Asia, markets in Japan, Hong Kong, China, South Korea and Malaysia pocketed gains despite Wall Street’s overnight faltering; Taiwan and Australia ended in the red.
FXTM analysts Lukman Otunuga and Han Tan said in a note: “Looking ahead, there could be even more volatility in store, with the quadruple witching day for US markets taking place next Friday. On Sept 18, Futures and Options on Indices and Stocks are set to meet their quarterly expiration, which can trigger heightened volatility and a surge in trade volumes.
“For reference, in the week before the June quadruple witching day, the S&P 500 tumbled by as much as 7.7 per cent and the VIX breached the 40 mark. Since the June 19 event, the VIX has moderated towards its long-term average of 20, while the S&P 500 added another 12 per cent through to the end of August,” they said.
The European Central Bank kept rates unchanged at its policy meeting on Thursday. And with that, all eyes will be on the US’ Federal Open Market Committee meeting next week.
Overall trading volume in the Singapore market stood at 1.24 billion shares worth S$925.7 million. Among the STI constituents, 13 counters were up and 11, down.
Bucking the stock market’s overall sour note, AEM Holdings jumped 34 Singapore cents or more than 10 per cent to S$3.63 after it raised its FY2020 revenue guidance on the back of sales-order visibility and business outlook.
Wilmar International rose 3 Singapore cents or 0.7 per cent to S$4.20. Citi Research said the recent price weakness in these shares could be temporary, as investors await the final regulatory nod for the much-awaited initial public offering of its Chinese arm.
Ascendas Reit closed unchanged at S$3.27. Its manager said the day before that the Reit had priced its S$300 million green subordinated perpetual securities under its S$7 billion Euro Medium-Term Securities Programme. The securities will effectively replace the existing perpetual securities, which are callable in October 2020 and hence, do not materially change the Reit’s credit metrics, said Moody’s Investors Service.