Trade talk woes weigh on markets

The Singapore market was not spared as stocks in Asia continued to slide on worries over the potential breakdown in US-China trade talks.

"For fear of sounding like a broken record, it was a sea of red cutting across the region as trade fears reigned supreme," IG market strategist Pan Jingyi observed.

"The heightened sense of volatility is expected to sustain until a clearer picture on trade can be derived."

The Straits Times Index's (STI's) losing streak continued, slipping 14.14 points or 0.4 per cent to 3,269.70 on Thursday.

However, market watchers noted that the STI still fared better than its regional peers.

Between the Singapore market's Wednesday and Thursday close, the MSCI Asia-Pacific Index slipped 1.1 per cent.

"It seems like the local market has priced in some of the possible effects of the trade talk and is also switching to 'a wait and see approach'.

"This is as Chinese officials arrive in the US at what has become a very crucial juncture in US-China trade relations," UOB Kay Hian's vice-president of equities and financial products Brandon Leu remarked.

"Technically, the STI is trading close to a key trendline support at 3,240."

Volumes continued to be heavy, clocking in at 1.35 billion securities or 10 per cent over the daily average in the first four months of the year.

Meanwhile, total turnover came to $1.33 billion, 29 per cent more than the January-to-April daily average.

Across the market, decliners outpaced advancers 288 to 141.

The benchmark index had 18 of its 30 components finish in the red.

The banking trio were mixed on Thursday. DBS Group Holdings added two cents or 0.1 per cent to close at $26.60. United Overseas Bank dropped 25 cents or one per cent at $25.48. OCBC Bank, which reports first-quarter earnings before market open today, slipped 13 cents or 1.1 per cent to close at $11.31.

DEFENSIVE

With "risk off" attitudes gaining traction among investors, defensive counters did the heavy lifting on the blue-chip index.

Among them, telco Singtel was the blue-chip index's most traded with 30.2 million shares changing hands, closing three Singapore cents or one per cent higher at $3.14.

ST Engineering added 12 cents or 3.1 per cent to end at $4.

"On the other hand, counters with large exposure to China like CapitaLand were among the worst performers, underscoring hefty risk associated to the trade tensions," CMC Markets market analyst Margaret Yang said.

Developments surrounding Best World International garnered much attention.

Its shares resumed trading yesterday, only to have its shares suspended by the SGX.

The bourse is looking into the accuracy of the skincare maker and distributor's announcement yesterday.

This refuted an April report by short-seller Bonitas Research on its business in China.

At 3.14pm - the time of the suspension - Best World shares were down 26 cents or 16 per cent at $1.36, on a volume of 28.8 million.

Yesterday, ARA US Hospitality Trust made its trading debut on the Singapore Exchange's mainboard at 87.5 US cents (S$1.20) for a stapled security.

However, it closed at its initial public offering price of 88 US cents.

Last week, KGI Securities analyst Geraldine Wong told The Business Times the business trust has attractive dividend yields, "in the high 7 per cent to low 8 per cent range" and may be one to watch for investors looking for dividend plays.

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