Singapore investors snap up US stocks in Q4 amid Wall St plunge

Singapore

THE final quarter of 2018 saw the US market taking its biggest fall in almost a decade, with investors from virtually everywhere cashing or pulling out - except those based in Singapore.

Figures just released by the US Treasury show Asian investors snapped up a net US$6 billion in US corporate stocks in October-December last year - and Singapore-based investors accounted for US$5.4 billion of that total.

On the whole, foreign investors - unnerved by rising US interest rates, an economic slowdown and ongoing China-US trade talks - dumped a net US$46.0 billion in stocks on Wall Street in the quarter which saw the Standard & Poor 500 and Dow indices plunged 13.97 and 11.8 per cent respectively, their worst showings since 2011.

Singapore-based investors are one of the biggest Asian traders on the New York Stock Exchange (NYSE). The others are the Japanese and Hong Kongers. The Japanese disposed of a net US$2.7 billion and Hong Kongers a net US$2.8 billion in US equities in Oct-Dec 2018. China, likely to join the ranks of the Asian big-time players soon, bought a net US$109 million in shares in the US stock market.

For the first, second and fourth quarter of last year, Singapore-based investors were net buyers of US equities, but the amount bought in the first two quarters were relatively small - US$1.6 billion and US$427 million, respectively. The investors were net sellers in the third quarter, unloading a sizeable US$10.4 billion. This resulted in an overall net sale of US$2.9 billion in US equities for the full year.

Which was in line with the position taken by other Asian investors, who sold a net US$13.8 billion in shares on the NYSE last year. In fact, foreign investors were on the whole net sellers in the US stock market in 2018. They sold a total US$132.1 billion in US stocks, with the Europeans alone cashing out US$106.6 billion of the total sum.

The foreign exodus brought the S&P 500 and Dow crashing for the first time in three years, posting an average 6.2 and 5.6 per cent drop in US dollar, respectively. It was the first time ever that the S&P 500 fell after rising in the first three quarters.

Concerns over the same uncertainties that spooked Wall Street, stock markets every where outside the US also tumbled in 2018. The MSCI World index fell 13.4 per cent in US dollar in the final quarter and 8.7 per cent for the year.

According to US Treasury figures, US investors unloaded a net US$27.2 billion in foreign equities in the Oct-Dec quarter and US$43.5 billion for the whole of last year.

In Singapore, though US investors picked up a net US$456 million of shares listed on the Singapore Exchange in the fourth quarter of 2018, when the ST index fell 5.8 per cent, they wrapped up the year as net sellers, dumping a total of US$8.4 billion in equities in the local bourse.

For whole of 2018, the ST index dropped 9.8 per cent.

In overall Asia, US investors cashed out a net US$16.4 billion in stocks in the final quarter of last year and a net US$3.1 billion for the full year. The MSCI index for Asia excluding Japan slipped 8.8 per cent in the Oct-Dec quarter and fell 12.4 per cent for the year.

The MSCI Japan index tumbled 17 per cent in the fourth quarter and finished the year 15 per cent lower.