Singapore shares hit 10-year low over COVID-19 fears

Singapore shares hit 10-year low over COVID-19 fears

FILE PHOTO: An SGX sign is pictured at Singapore Exchange
An SGX sign is pictured at the Singapore Exchange on Jul 19, 2017. (Photo: Reuters/Edgar Su)

SINGAPORE: Singapore's stock market went into a steep slide on Friday (Mar 13) as fears over the COVID-19 pandemic deepened, joining a global rout that has seen shellshocked investors across the world tip into a "sell-everything mode".

The benchmark Straits Times Index (STI) fell as much as 6.3 per cent to 2,510.88 during intra-day trading, Bloomberg data showed.

This is the lowest since Jul 24, 2009, when it touched 2,503.38, according to data from Phillip Securities' online trading platform.

The index ended the day at 2,634, down 1.7 per cent, with losers outpacing winners at 430 to 137.

"This is a volatile situation that is likely to last for some time," Ms Pan Jingyi, market strategist at IG, told CNA.

"The fact of the matter is that the coronavirus gives a lot of uncertainty and although we have a lot of policy support, we will see a little bit more caution. I would recommend being a little more cautious at this point in time," she added.

Property and financial counters were among the worst hit, with Mapletree Commercial Trust, City Developments Ltd, CapitaLand and DBS losing as much as 10.2 per cent, 7.6 per cent, 7.8 per cent and 6.5 per cent respectively.

READ: Changi Airport's passenger traffic fell 32.8% in February amid COVID-19 outbreak

"It is worrisome and diving too fast," said Mr Alvin Lee, 41, who holds stocks in Singapore and the US.

"With the current market situation it seems like everyone is selling. But it might be a good chance to buy some if you have spare cash," he added.

Housewife Mrs Tan SL, 40, agreed: "Panic selling doesn't do us good. Be rational. Time to buy good blue chip stocks."

MAS SAYS IT STANDS READY TO ENSURE ORDERLY FUNCTIONING

Singapore's central bank said on Friday that the Singapore dollar money market and foreign exchange market are functioning normally in the face of heightened volatility in global and domestic financial markets.

The Monetary Authority of Singapore left a higher level of liquidity in the banking system through its money market operations, and Singapore dollar interest rates have eased in tandem with global interest rates, it said.

"Financial markets globally have come under strain in reaction to the now-widespread COVID-19 outbreak," said MAS.

"MAS stands ready to ensure the orderly functioning of financial markets and the stability of the financial system in Singapore," it added.

Singapore on Friday extended border restrictions to individuals with recent travel history to Italy, France, Spain and Germany

The new restrictions, which take effect at 11.59pm on Sunday, come after an increase in imported cases in Singapore, particularly of those with travel history to European countries, the Ministry of Health (MOH) said on Friday.

Additionally, with immediate effect, all visitors entering Singapore with fever or symptoms of respiratory illness will also be issued with a 14-day Stay-Home Notice, regardless of their travel history or the results of swab tests at the checkpoint.

The health ministry has also put in place additional social distancing measures, saying that all ticketed cultural, sports and entertainment events with 250 participants or more are to be deferred or cancelled.

READ:‘Situation in Singapore remains under control’: PM Lee’s COVID-19 address in full

Singapore had 187 confirmed cases of COVID-19 as of Thursday, of which 96 cases have recovered and been discharged from hospital.

Globally, about 134,530 people have been infected by the coronavirus across the world and 4,970 have died, according to a Reuters tally.

Singapore has said that it expects the COVID-19 outbreak to potentially extend past one year, with Prime Minister Lee Hsien Loong warning on Thursday that the country faces a "serious situation", with a "possible spike" in new cases, more clusters and new waves of infection from other countries. 

However, the situation remains under control and Singapore will not raise its Disease Outbreak Response System Condition (DORSCON) level to Red, he also said.

READ: Ticketed events with 250 participants or more to be deferred or cancelled under COVID-19 social-distancing measures: MOH

"SELL-EVERYTHING MODE"

The slide in Singapore's stock market followed a global rout that saw US stocks plunge nearly 10 per cent overnight in their biggest one-day losses since the 1987 market crash.

"Global markets appear to have been tipped over into a sell-everything mode," said Ms Pan in a market update.

"The message that the market is giving to us - with safe haven assets being sold off, a lot of alternative assets - suggest that sentiment is being hit quite badly," Ms Pan told CNA separately. 

She said that she expects some form of stability to reach the markets in under two months.

"In terms of market stablisation ... The wait for civilisation to reach the shores will take six to seven weeks," she said.

READ: How China turned the tide on COVID-19

Mr Andrew Slimmon, head of applied equity advisors team at Morgan Stanley Investment Management, said that while it would be "naive not to concede a recession is a possibility", it would be "highly unlikely". 

"Don't get swayed by the doom and gloomers. I think this health scare will be behind us by the summer, but more pain will come near-term and I would be patient on chasing incremental dollars into the market," he said. 

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Source: CNA/aj

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