Slump in equity-guzzling Reits, Sats are signs of a coming ice age for the stock market

THE Straits Times Index (STI) lurched below the 3,000 mark for about 45 minutes during early trading on Monday (Oct 17). But it managed to claw its way back up to close at 3,015.75 – 0.8 per cent below where it ended the preceding week.

With central banks around the world – including the Monetary Authority of Singapore – committed to fighting inflation, it is possible that the local market benchmark will eventually plumb below that psychologically significant threshold with more conviction in the weeks and months ahead.

This could have adverse implications for the 30 companies and real estate investment trusts (Reits) that form the STI, as well as the broader market. In particular, raising equity for any kind of growth initiative is likely to become more difficult.