STI sinks into the red as factory output falls

SINGAPORE shares retreated on Friday, following disappointing industrial production figures that exacerbated worries about economic weakness. 

Singapore's benchmark Straits Times Index (STI) fell 1.3 per cent or 32.84 points to 2,579.51 on Friday. 

Losers outnumbered gainers 336 to 132, with 1.20 billion securities worth S$1.31 billion changing hands. 

Singapore's industrial production was down by 6.7 per cent year on year (yoy), falling short of the 2.6-per-cent overall contraction forecast by private-sector economists in a Bloomberg poll.

Against this backdrop, economists are expecting further downside risks to the city-state's second quarter gross domestic product (GDP).

OCBC economist Howie Lee said on Friday that while full-year GDP growth is still expected to fall between -6.0 per cent yoy to -5.0 per cent yoy, they expect "risks to be firmly tilted to the downside".

This comes on the back of escalating United States-China tensions and potential dampening of business and consumer sentiment if "current fiscal measures expire without an adequate renewal of support", he said. 

Among the STI constituents, Mapletree Industrial Trust, Ascendas Reit (real estate investment trust) and Mapletree Logistics Trust once again emerged as the top-performing counters for the day. Mapletree Industrial Trust rose 1.9 per cent to S$3.16, Ascendas Reit gained 1.5 per cent to S$3.48 while Mapletree Logistics Trust ended up 0.5 per cent to S$2.14. 

Ascendas Reit was also among the most active counters on the blue-chip index following reports that analysts have increased their target prices for units of the Reit. Its diversified portfolio and potential accretive acquisitions are likely to help offset the uncertain outlook, they said. 

At the bottom of the table was Keppel Corporation, which fell 4 per cent to S$5.71. The conglomerate on Friday warned that it will recognise material impairments in its results for the second quarter this year, mainly from the offshore and marine business.

The most heavily traded counter for the day was Genting Singapore, which lost 0.7 per cent to end the day at S$0.75 after more than 35 million shares changed hands. 

The STI's performance was in line with regional markets, which ended lower amid intensifying US-China tensions and disappointing jobless claims data in the US.