Singapore stocks hit by heightened recession worries; STI down 0.3%

DESPITE Wall Street ending higher after the US entered into a technical recession or 2 straight quarters of gross domestic product contraction, Singapore shares closed lower on Friday (Jul 29) due to heightened recession fears across the region.

The Straits Times Index (STI) dipped 9.09 points or 0.3 per cent to 3,211.56, following reports about the world’s two largest economies facing economic headwinds.

China is now widely expected by analysts to miss its 2022 economic growth target of around 5.5 per cent, after state media said on Thursday that the economy will try hard to achieve the best possible results this year.

The US also reportedly entered into a technical recession, further fuelling fears for Singapore’s key trading partners such as the eurozone.

The International Monetary Fund, meanwhile, has lowered its growth forecast for the Asia-Pacific region this year to 4.2 per cent, 0.7 percentage point lower than what it had expected back in April.

The STI, however, managed to clock a gain of 1 per cent over the week.

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Ground handler and inflight caterer S ATS rose 1.3 per cent to S$3.97 on Friday, as it appeared to be coat-tailing on the tailwinds its airline customer Singapore Airlines enjoyed after the carrier’s return to profitability. Last week, mainboard-listed SATS posted a net loss of S$22.5 million for its first fiscal quarter to June.

After guiding for a significantly higher net profit for the first half of FY2022 on Thursday, shares of Food Empire jumped some 10.8 per cent to S$0.515. The company attributed the financial performance to better operating profit owing to higher average selling prices, higher currency exchange gain, as well as an increase in share of profit from an associated company.

Overall, decliners beat gainers 258 to 240 in the broader market on a turnover of 1.29 billion securities with a total value of S$1.35 billion.