S’pore shares swayed by China’s yuan moves, Latest Business News - The New Paper

S’pore shares swayed by China’s yuan moves

This article is more than 12 months old

After dropping as much as 1.6% STI regains ground to close 24 points lower at 3,170

Singapore stocks continued to take a beating yesterday as escalating US-China trade tensions rattled investors, but pared back early losses after Beijing moved to stabilise the yuan.

The Straits Times Index dropped as much as 1.6 per cent to a near two-month low but regained ground steadily over the session to close at 3,170.47, lower by 24.04 points or 0.75 per cent.

Losers outnumbered gainers 318 to 135, or more than two stocks down for every one up. A total of 1.3 billion securities worth $1.64 billion were traded.

"Who doesn't love a good old Turnaround Tuesday story in the markets? ... We have the PBOC (People's Bank of China) to thank for tweaking the fix just enough to convince the markets mainland authorities are not embarking on a wave of aggressive yuan depreciation," said Mr Stephen Innes, managing partner at VM Markets.

China's central bank took steps to limit weakness in the yuan after the currency fell to its lowest level against the US dollar since August 2010 on Monday, prompting US President Donald Trump to label China a currency manipulator in a tweet.

"The PBOC had the fixing stronger than seven to correct herding behaviour yesterday," said Mr Stephen Chiu, a strategist at Bloomberg Intelligence.

"It's a message to the US - we aren't manipulating the currency weaker. If markets drive dollar-yuan rate even higher and out of hand, I don't think the PBOC will sit there doing nothing."

Singapore's benchmark was dragged down by industrials and financial stocks yesterday. Conglomerate Jardine Matheson Holdings fell 0.89 per cent or US$0.51 (S$0.70) to US$56.87, while Jardine Cycle & Carriage lost 3.81 per cent or $1.24 to $31.31.

DBS Group and UOB were also among the bourse's largest decliners. DBS closed at $24.88, down 1.62 per cent or $0.41, while UOB finished 0.97 per cent or $0.25 lower at $25.66.

OCBC equity analysts yesterday maintained their "buy" call on UOB but noted that the bank's medium-term outlook continues to hinge on US-China trade developments and interest rate direction. Battered risk appetites also saw a clutch of large-cap stocks slide badly.

Hutchison Port Holdings Trust (HPH Trust) finished at US$0.194, down US$0.004 or 2.02 per cent. HPH Trust, a container port trust affiliated with Hutchison Ports, had seen its second-quarter performance affected by ongoing challenges in the global trade environment.

In July, the trust reported a 1.4 per cent dip in its revenue and other income to HK$2.7 billion (S$475 million) for the three months ended June 30, from HK$2.8 billion the year before.

Hongkong Land, a member of the Jardine Matheson Group, slumped US$0.17 or 2.96 per cent, to US$5.57.

Shares of Singapore Press Holdings, which recently reported a 44 per cent drop in net profit for its third quarter, closed at $2.09, their lowest since emerging from the Global Financial Crisis in early April 2009.

Likewise, Singapore Airlines shares ended at their lowest in a decade, finishing at $9.04, $0.01 or 0.11 per cent lower.

While the imminent threat of a currency war has receded, the market is "still hostage to escalating trade tensions", cautioned VM Markets' Mr Innes.

Beijing has vowed to hit back if Washington goes ahead with its latest tariff threat, and Chinese state media reported late on Monday that firms in the country are suspending agricultural product purchases in response to new tariffs from the US.

For full listings of SGX prices, go to https://www2.sgx.com