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STI closes 0.53% lower on Friday as Trump takes fire at China tech

THE Straits Times Index (STI) fell 13.59 points or 0.53 per cent to 2,545.51 on Friday as US president Donald Trump's growing attack on the Chinese tech sector sent Asian stock indices lower, while punters continued to hope for a US stimulus package to keep the global economic recovery on track.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Trump prohibited US firms from doing business with the most popular Chinese tech companies TikTok and WeChat due to national security issues. These actions also aim to curb China’s rising tech power and escalate the cold war between the two countries."

The Hang Seng Index shed 1.6 per cent and the Shanghai Composite fell 0.96 per cent, while gold was headed for its best week since the global financial crisis. The Nikkei fell 0.39 per cent and the KLSE slipped 0.66 per cent.

Friday's losses were not enough to wipe out earlier gains for local shares. The STI ended the week up 15.69 points or 0.61 per cent.

About 1.52 billion securities worth S$1.38 billion changed hands on Friday. Losers outnumbered gainers 288 to 159.

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Thai Beverage, the most actively traded index stock, fell two Singapore cents or 3.2 per cent to S$0.605 on Friday.

Earlier in the week, UOB Kay Hian added Thai Beverage to its alpha picks. The spirits maker trades at 16.3 times its expected earnings for FY20, below its five-year mean price-to-earnings ratio of 20 times, the brokerage said, adding: "We see resilient consumption volumes from its off-trade spirits segment, which could shelter the group from the full-blown effects of Covid-19 even if a subsequent round of stay-home measure materialises. We also highlight that industry data for Thailand domestic sales of white spirits was up 8.5 per cent year-on-year in the June quarter.

DBS analysts wrote: "Watch out for opportunities in the undervalued cyclical space as several are trading at historic valuation extremes. While there is a lack of strong upside catalyst, we believe the current lull period for these stocks is an opportunity to accumulate. Our picks are CapitaLand, City Developments, ComfortDelgro, ThaiBev and OCBC."

Top gainer Jardine Matheson rose 1.24 per cent to US$40.80. Top loser SGX fell 2.48 per cent to S$8.64.

Earnings season continues in full swing next week. Wilmar will report half-year earnings after trading next Tuesday. CityDev and UOL Group will report earnings next Thursday. ST Engineering will report earnings next Friday.

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