Singapore shares dip 0.2% ahead of Budget 2020

AHEAD of Tuesday's Singapore Budget reading, investor attention in the city-state remained on keeping count of the rising cases of Covid-19 infections and the economic impact of the outbreak, resulting in a less-than-desirable start to the week.

On Monday, Singapore's Straits Times Index (STI) opened flat but trended down as the session went on, eventually finishing 7.03 points or 0.2 per cent lower at 3,213.00.

Sentiment in the Republic also dipped following the downgrade of Singapore's economic forecast for 2020. That being said, "financial markets are now expecting some serious deficit spending from the government to offset the coronavirus slowdown," Oanda Asia-Pacific senior market analyst Jeffrey Halley said.

Elsewhere in the Asia-Pacific, benchmarks were mixed. Australia, Japan, Malaysia, South Korea and Taiwan ended lower. On the other hand, China and Hong Kong were markedly higher as investors continue to price more stimulus efforts by Beijing to counter the impact of Covid-19.

On Monday, China's central bank lowered the interest rate on its medium-term lending. This paves the way for the reduction of China's benchmark loan prime rate, expected to be announced on Thursday.

Trading volume in Singapore was 1.61 billion securities, 36 per cent over the 2019 daily average but total turnover came to S$945.60 million, 89 per cent of last year's intraday mean.

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Commenting on the market turnover, one dealer told The Business Times: "With US markets closed on Monday to celebrate President's Day, liquidity among the market's large caps or index stocks was lower but trading in smaller listings remained vibrant."

Across the broader market, decliners outpaced advancers 205 to 182. The blue-chip index had 18 of its 30 components closing in the red.

ComfortDelGro was the STI's most active counter. Shares in the transport operator fell S$0.09 or 4.1 per cent to S$2.09 with 37.4 million shares traded after reporting on Friday a 12.6 per cent decline in FY2019 net profit due in part to an impairment of S$27.3 million for its taxi business.

Thai Beverage was another active index stock, gaining 4.5 Singapore cents or 5.7 per cent to S$0.83 with 35.9 million shares changing hands.

Last Friday, the STI's best performer of 2019 posted a 14 per cent increase in Q1 net profit to 8.4 billion baht (S$380 million), from 7.4 billion baht a year ago. The better-than-expected performance triggered some brokerages like Phillip Securities and RHB Securities to upgrade their calls on the brewer.

"Not only has spirit volumes been healthy, customers are purchasing the more premium and higher-margin brown spirits. Beer disappointed but we expect a rebound in volumes after the negative episode," Phillip Securities head of research Paul Chew said.

Among property trusts, units in Far East Hospitality Trust were unchanged at S$0.66. Maybank Kim Eng downgraded the trust to "hold", and lowered its price target to S$0.70 due to the impact of Covid-19 on the hospitality sector. 

Rex International jumped 2.9 Singapore cents or 17 per cent to S$0.20 after trading in the counter resumed at 1pm. During the midday break, the upstream oil and gas firm announced that subsidiary Masirah Oil had achieved successful oil flow from its Yunma 1 well in Oman.