STI slides 25.23 points to 2,623.67 on economic-recovery concerns

SINGAPORE stocks weakened on Thursday, weighed down by dour economic prognoses at home and around the world.

The benchmark Straits Times Index ended the day at 2,623.67, down 25.23 points or 0.95 per cent. All but five of its 30 components closed lower. Across the wider market, losers outnumbered gainers by a wide margin of 349 to 145.

Genting Singapore was in the spotlight after its Resorts World Sentosa (RWS), one of only two integrated resort operators, announced that it would be laying off a significant number of employees.

The prospect of cost savings did nothing to lift investor sentiment though. RWS re-opened to visitors in early July, but travel restrictions and safe-distancing measures make it unlikely that business will improve quickly.

Shares in Genting Singapore ended the day at S$0.765, down 2.55 per cent. It was the worst-performing STI component stock for the day.

Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), warned today that there is substantial uncertainty over the global economic outlook, and that a recovery will not come quickly.

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He also said MAS is in active discussions with the local banks on capital-management matters, which could include conversations around a restriction of their dividend payments.

DBS, OCBC and UOB, which account for the bulk of the STI, ended the day 1.28 per cent, 1.1 per cent and 1 per cent lower respectively.

Among the smaller-cap stocks, Top Glove had a tough day after the US authorities barred the import of its products, possibly over a violation of labour rules. The stock ended the day at S$6.49, down 11.1 per cent.

Other healthcare stocks that have charted strong gains in recent months were also weaker. UG Healthcare ended at S$1.32, down 14.3 per cent. Riverstone closed at S$3.00, down 2.3 per cent. Medtecs International ended at S$0.52, down 19.4 per cent.

Elsewhere, the International Monetary Fund warned in a report that the rate of bankruptcy for small and medium-sized businesses across 17 countries that it has studied could triple to 12 per cent this year, versus 4 per cent before the pandemic.

Key markets around the region were also broadly softer today. In particular, Shanghai Composite Index and Hang Seng Index were down 4.5 per cent and 2 per cent respectively.