A cruel month of reckoning for the market

Singapore stocks lost steam last month, leaving the market value nearly flat after a stellar performance in March.

The total market capitalisation of the 763 companies listed on the Singapore Exchange came to $847.76 billion at the close of trade last Friday - up just 0.05 per cent from the $847.38 billion as at March 31 and 3.2 per cent higher than the $821.87 billion on Feb 29.

But this is still the market's highest value this year.

The muted result came as the Straits Times Index (STI) dipped 0.08 per cent to 2,838.52 points last Friday amid news that the United States economy had grown at its slowest pace in two years during the first quarter and that the Bank of Japan was holding off on more stimulus efforts.

Still, April's performance was weaker than in March, which registered a 3.1 per cent jump in month- on-month market value.

IG market strategist Bernard Aw said: "Momentum has come off, largely because the recent stock rally, in the first place, wasn't based on any fundamental improvements in the global economy."

He added that the lacklustre performance was largely in line with that in the US, given the general shortage of positive leads elsewhere. "It only happened because investors were chasing day-to-day news and didn't have anywhere else to go."

Of the 30 STI constituent stocks, 10 ended the month in the red and one was flat.

Agri-business giant Wilmar International, finishing at $3.71, was the only STI counter that chalked up gains of more than 10 per cent. This lifted its market cap by 10.4 per cent to $23.76 billion, making the counter the eighth largest by value on the exchange.

Singapore Airlines was the second-biggest gainer in April as its shares advanced 7.1 per cent to $11.50, pushing its market cap up 0.7 per cent to $13.8 billion.

On the other side of the ledger, Hutchison Port Holdings Trust came off worst among the STI component stocks, with its shares slumping 10.1 per cent to 44.5 US cents. This dragged its market cap down by 11.4 per cent to US$5.21 billion (S$7 billion).

Keppel Corporation also lost heavily. Its shares fell 6.6 per cent to $5.40, while its market cap sank 7.4 per cent to $9.83 billion.

Across the bourse, insurance and investment firm Prudential was again the largest by market cap at US$64.7 billion, although its value slid 3.5 per cent from March 31.

Singtel took the second top spot at $61.5 billion, after its shares closed flat at $3.86.

Mr Aw believes the outlook will remain cloudy given the uncertainty still enveloping crude prices, the US economy and the potential implications of a Brexit, as cautious sentiment seeps back into the market.

"It really depends on the data flow, and there are not many things to look forward to," he said.

This article was first published on May 3, 2016.
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