Singapore stocks end flat amid regional rally amid US rate cut expectations
[SINGAPORE] Local stocks ended flat on Monday (Sep 8) while Asian markets rallied amid expectations that the US will cut rates in September, given a weak jobs report.
The benchmark Straits Times Index (STI) inched up 0.03 per cent or 1.44 points to 4,308.52. Across the broader market, gainers outnumbered losers 394 to 211, after two billion securities worth S$1.3 billion changed hands.
Elsewhere in the region, key indices largely ended higher. Japan’s Nikkei 225 gained 1.5 per cent, South Korea’s Kospi Composite was up 0.5 per cent, the Hang Seng Index rose 0.9 per cent, while the FTSE Bursa Malaysia KLCI ended 0.5 per cent higher.
US non-farm payrolls were below expectations in August, while the unemployment rate rose in July, causing bond markets to fall and creating an “almost certain” expectation that the US will cut interest rates in September, noted Glenn Thum, research manager at Phillip Capital.
Thum expects banks will see further pressure on net interest margins from the lower interest rates, although this should be offset by loan growth and fee income.
Meanwhile, real estate investment trusts will continue to benefit from the slowing labour market and higher rate cut expectations, which would improve financing costs, he said.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“We continue to like DBS for its fixed dividend policy, which will reassure investors of a steady dividend per share despite profit volatility,” he said.
Yangzijiang Shipbuilding was the top gainer on the STI, rising 2.3 per cent or S$0.07 to S$3.17.
Singtel saw the biggest decline, falling 1.4 per cent or S$0.06 to S$4.33.
SEE ALSO
The local banks were mixed – DBS gained 0.1 per cent or S$0.04 to S$50.85; while OCBC fell 0.2 per cent or S$0.03 to S$16.82; and UOB lost 0.5 per cent or S$0.19 to S$35.65.
