Singapore: STI falls for third consecutive session; dealers see lack of liquidity

"THE Singapore market has lost its mojo. There is now nothing to differentiate it from the others in the region." This was a declaration by a dealer when asked to describe the funk in which the local market finds itself. Others agreed but half-heartedly said it was probably caution ahead of the Wednesday release of the minutes of the most recent US Federal Reserve Open Market Committee meeting. However, this was not taken seriously since it does not explain the lethargy of the past year or so.

"The truth is that money has departed our market and hasn't really returned," said a dealer. "This is amazing and so frustrating - our stocks can have single-digit PE ratios, be debt-free and have nothing negative on the horizon but their prices can fall simply because there's no liquidity. In other markets, stocks can have no earnings or triple-digit PEs, yet they can double simply because they have liquidity."

The Straits Times Index (STI) on Wednesday dropped 14.36 points to 3,439.68 amid turnover of 1.6 billion units worth S$1.06 billion. Excluding warrants there were 175 rises versus 233 falls. It was the third consecutive fall for the STI that brought its loss for the week to 23 points or 0.7 per cent.