STI down 2% at the end of a volatile week

A DISASTROUS start, an even worse mid-week session, followed by an encouraging finish - this sums up the week just past, during which equity markets everywhere continued to display massive volatility, reportedly because of oil price weakness and large swings in China where prices are more likely to rise than fall.

The week kicked off with the Straits Times Index losing almost 38 points or 1.4 per cent, and even though it regained all of this on Tuesday when it rebounded by 45 points, the worst was reserved for Wednesday and Thursday when the loss was just over 100 points. Friday's 44.39-point rebound to 2,577.09, however, helped trim the loss for the week to 53 points or 2 per cent.

Amid all the gloom, liquidity has improved. Daily averages are now regularly above S$1 billion, roughly 20-30 per cent higher than a month ago. This is encouraging, though taking some of the shine off is that almost three-quarters of daily turnover comes from the 30 index components, meaning that the remaining 800-odd stocks only contribute one quarter of daily business. On Friday, S$1.4 billion was done, of which S$1.1 billion or 79 per cent was in STI members.