Uneventful session sees STI slide

With neither economic data releases to ponder over nor updates from the US-China trade front, yesterday's session was mostly uneventful.

But for a day of light trading, there was a noticeable pick-up in property stocks and real estate investment trusts (Reits).

The Straits Times Index (STI) opened slightly higher but retreated as the session wore on, eventually settling at 3,056.47, down 11.05 points or 0.4 per cent. The blue chip index is down 0.4 per cent this year.

It was a mixed bag elsewhere in the Asia-Pacific. Markets in Australia, Japan, Malaysia and South Korea closed in the black. On the other hand, China and Hong Kong dipped. Hong Kong's benchmark has lost 0.9 per cent this year.

Oanda Asia-Pacific senior market analyst Jeffrey Halley noted that an empty data calendar globally saw investors probably dwelling on the "recession fears making all the noise on Wall Street", as the US Treasury yield curve inversion deepened on Tuesday's session.

Reasonably speaking, safe haven assets should continue their outperformance over equities.

Defensively positioned stocks and those that gain most from low borrowing costs would fare better too.

FXTM market analyst Han Tan believes the gains in safe haven assets "only speak to the rising fears in the markets which have prompted a clear pivot towards risk aversion".

"Investors cannot rule out another spike in US-China trade tensions coming out of the blue in the near-term, which ensures that markets will remain trepidatious for the time being," Mr Tan added.

In Singapore, trading volume clocked in at 890.79 million securities, three-quarters the daily average in the first seven months of this year.

Total turnover came to $1 billion, 94 per cent of the January-to-July daily average.

Across the market, decliners trumped advancers 242 to 167. The blue-chip index had 16 of the 30 counters closing in the red.

STILL MOST ACTIVE

On counter activity, the broken record keeps playing, as Yangzijiang Shipbuilding (down two cents or 2.2 per cent at 88.5 cents) remained the most active counter on the STI with 36.8 million shares changing hands.

With investors preferring to stay conservative, the banking trio were lower. DBS Group Holdings closed $0.15 or 0.6 per cent lower at $24.02; OCBC Bank fell $0.07 or 0.7 per cent to $10.51 and United Overseas Bank ended at $24.41, dipping $0.05 or 0.2 per cent.

Reits were a bright spot, with the iEdge S-Reit Index gaining 13.84 points or 1 per cent to close at 1,413.65.

Mapletree Commercial Trust (MCT) was the best performer in the asset class, advancing $0.07 or 3.3 per cent to $2.19.

MCT has the largest market capitalisation in the STI reserve list, making it the prime candidate for index inclusion at the next review in September at the expense of HPH Trust (up 0.5 cent or 2.3 per cent at 22.5 cents), UOB Kay Hian said yesterday.

Property developers also outperformed the STI, with CapitaLand (up one cent or 0.3 per cent at $3.39) and City Developments (up $0.20 or 2.2 per cent to $9.33).

Venture Corporation edged down one cent or 0.1 per cent to $14.54 after Philip Morris International was said to be in merger talks with Altria Group.

Venture is widely believed to be one of the makers of the IQOS, a smokeless tobacco device designed by Philip Morris.

Citi Research analyst Patrick Yau is of the view that the proposed deal underscores that the British tobacco giant is "extremely optimistic about IQOS' prospects in the US as well as the potential to expand Altria's portfolio of vapour products beyond the US".

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