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Singapore stocks slip, 4 names dropped by MSCI

SINGAPORE shares slipped on Wednesday, ahead of an address by the US Federal Reserve Chairman Jerome Powell.

The market appeared to be watching for comments on the US economy and various extraordinary Fed stimulus and lending programs.

In Singapore, the Straits Times Index (STI) opened at 2,573.71 before settling at 2,572.01, down 15.80 points or 0.61 per cent for the day. A total of 2.2 billion securities, worth S$1.6 billion, were traded.

Singapore Airlines (SIA) saw trading in the rights for its mandatory convertible bonds (MCBs) open at S$0.001 and hitting S$0.019, before closing at S$0.005. Meanwhile, SIA's rights traded in a range from S$0.95 to S$1.11, and settled at S$0.95. SIA closed at S$4, down 29 Singapore cents.

Only one stock, Mapletree Logistics Trust, will be added to the MSCI Singapore Index on May 29 following a review. Four will be deleted - ComfortDelGro Corporation, Sats, Sembcorp Industries and Singapore Press Holdings. The four latter stocks fell while MLT ended the day up 2.2 per cent at S$1.83.

James Ashley, head of international market strategy at Goldman Sachs’ strategic advisory solutions team, said investors are seeing a dichotomy between the bullish views in the market and the ongoing output of bad economic data. He warned that the prospect for recovery may be uneven.

“The latest IMF forecast showed negative growth for all major economies but with different magnitudes. Investors should be selective on their country exposure and expect between weeks to several months of challenging macro news.

“It will be a long time to get back to normal and we shouldn’t assume recovery to be linear. Even after the recovery, we are looking at a lower growth, lower interest rate, and lower inflation environment,” Mr Ashley said.

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