You are here

Singapore shares close lower for the week on rout in China

Friday, January 8, 2016 - 17:35
singaporestocks.jpg
TO say it hasn't been a good start to 2016 might be an understatement, given the plunges global equities have suffered this past week. China has been blamed for the losses, perhaps a convenient scapegoat for overvaluation of risk assets rooted in the easy money policies pursued by major central banks for several years now, starting with the US Federal Reserve and adopted by the European Central Bank and the Bank of Japan.

TO say it hasn't been a good start to 2016 might be an understatement, given the plunges global equities have suffered this past week. China has been blamed for the losses, perhaps a convenient scapegoat for overvaluation of risk assets rooted in the easy money policies pursued by major central banks for several years now, starting with the US Federal Reserve and adopted by the European Central Bank and the Bank of Japan.

Even so, the China authorities' inept attempts to stem the bleeding in their stock market has undoubtedly contributed to the contagion selling everywhere. On Thursday for example, regulators removed ill-conceived circuit breakers that had only just been installed on Monday.

Regulatory ineptitude aside, one consolation available to players in the local market - if it can be called that - is that volume spiked up mid-week to S$1.6 billion, the highest since window-dressing boosted turnover to S$1.7 billion on Nov 30 last year.

On Friday, some stability returned, reportedly because China, after lowering the yuan rate eight consecutive times, raised it.

Short-covering all around the region as well in the Dow futures thus helped the Straits Times Index avoid a fifth straight fall when it rebounded 21.32 to 2,751.23, though the loss for the week - and the year so far - still amounted to a considerable 131 points or 4.5 per cent. Turnover on Friday amounted to 1.4 billion units worth S$1.2 billion and excluding warrants there were 235 rises versus 150 falls.

Powered by GET.comGetCom