investors dump singapore shares taking the sti down over 1 5 per cent 677912015

Stocks on the Singapore Exchange collapsed over 1.5 per cent in a market-wide sell-off. Investors fled sectors such as technology and telecom, taking refuge instead in healthcare and Chinese stocks.

One purported reason for the fall is the impending change in the liquidity thresholds stipulated for the Straits Times Index, to be effective from September 18, 2015. Under the new rule, securities must turnover at least 0.10 per cent (previously 0.05 per cent) of their shares on issue based on their median daily trade per month in 10 of the 12 months prior to the March or September reviews. For existing constituents, securities must trade at least 0.08 per cent (previously 0.04 per cent) of its shares on issue in 8 of the 12 months.

Indices and sectors

The Straits Times Index (STI) ended 51.36 points or 1.51 per cent lower to 3,340.75, taking the year-to-date performance to -0.73 per cent.

The FTSE ST Mid Cap Index declined 0.30 per cent, while the FTSE ST Small Cap Index declined 1.10 per cent.

The Singapore Exchange traded a volume of 1,519.9 million shares valued at SG$1,748.9 million. Losers outnumbered gainers by 340/135.

Amongst the FTSE ST sectors, the top gainers were healthcare (+3.05 per cent), China (+1.07 per cent), China top index (+0.45 per cent) and maritime (0.28 per cent). The largest losing sectors were technology (-6.50 per cent), telecommunications (-3.25 per cent), consumer services (-1.56 per cent), basic materials (-1.42 per cent) and oil and gas (-1.31 per cent).

Stocks

Singapore Exchange Limited (SGX:S68) said Tuesday that it was unaware of any particular reason that could explain the unusual decline and trading activity in its shares, according to the Straits Times. The stock has fallen over 6 per cent since last Wednesday.

SHC Capital Asia Ltd (SGX:565) said Tuesday that it was considering a reverse takeover of Tong Da Medical Devices for a consideration of SG$120 million to be satisfied through the issue of shares at SG$0.07 per share to the owners of Tong Da. Last August, SHC sold off its core insurance business, becoming in the process, a cash company.

Global Invacom Group Ltd (SGX:QS9) announced Tuesday its plans to acquire US satellite terminal maker Skyware Global for cash and shares aggregating US$11.6 million (SG$15.64 million). According to the Straits Times, the acquisition would catapult Global Invacom to world leadership in Very Small Aperture Terminals (VSAT).

Ezra Holdings Limited (SGX:5DN) fell nearly 13 per cent to SG$0.340 as investors stampeded out of the stock following the announcement by the company of a rights issue to raise funds for refinancing its debt.

Economic news

According to a report in AsiaOne, the daily volume of fuel oil trades effected during the Asian pricing process on Tuesday touched the highest in over five years. The price assessment process is facilitated by Platts, and 620,000 tonnes of fuel oil were traded on Tuesday.

Singapore’s Purchasing Managers’ Index (PMI) rose to 50.2 in May from 49.4 in April, showing that the manufacturing sector was recovering. The PMI has crossed above 50, the borderline between expansion and contraction of manufacturing activity, for the first time in five months, according to Straits Times.

A survey by global professional services firm Towers Watson covering 2,000 responses from companies located in 19 countries across the Asia-Pacific showed that Singapore employees could expect to see their salaries grow 4.4 per cent this year, chiefly due to low inflation. Salaries grew by 4.3 per cent last year, according to the Straits Times.

Overnight on Wall Street, the Dow Jones Industrial Average fell 28.43 points, or 0.16 per cent, to 18,011.94, the S&P 500 lost 2.13 points, or 0.1 per cent, to 2,109.6 and the Nasdaq Composite dropped 6.40 points, or 0.13 per cent, to 5,076.52.