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The Straits Times Index (STI) experienced a notable drop of 1.1% or 38.39 points on August 2, closing at 3,381.45, largely influenced by a significant slide in Seatrium’s stock and a broader downturn in global markets. The local market saw 422 stocks decline compared to 199 that advanced, with trading volumes reaching 1.3 billion shares valued at $1.7 billion.
The decline in the STI was precipitated by a combination of factors, including disappointing earnings reports from Seatrium and negative sentiment following a turbulent session on Wall Street. The Dow Jones Industrial Average fell nearly 500 points, or 1.2%, while the Nasdaq dropped 2.3% and the S&P 500 recorded its largest intraday swing since November 2022, ending 1.4% lower. This global market retreat set a somber tone for regional exchanges.
Regional indices mirrored the global slump. Hong Kong’s Hang Seng index plummeted 2.1%, South Korea’s Kospi tumbled 3.7%, and Japan’s Nikkei 225 saw a steep decline of 5.8%. Malaysian markets also fell by 0.8%, while Australian stocks suffered their worst day in nearly two years, closing down 2.1%.
In Singapore, Seatrium, a key offshore and marine player, was the STI’s biggest loser, plummeting 11.3% to $1.49 despite reporting a profit of $36 million for the first half of the year, a reversal from its previous loss. This drop in Seatrium’s stock significantly contributed to the overall decline of the STI.
On a positive note, Pan-Asia retailer DFI Retail Group saw its stock rise by 2.3% to US$1.78, driven by more than doubling its underlying profit to US$75.6 million for the six months ending June 30.
Local banks also faced pressure, with DBS Bank slipping 1.9% to $35.31, OCBC Bank falling slightly by 0.1% to $14.80, and UOB decreasing by 0.7% to $31.83. Analysts from RHB noted that UOB’s capital retention strategy has led to more muted growth in yields and dividends, which may be a concern for investors seeking income during a period of declining interest rates.
The combined effect of international market trends and local corporate performance underscores a challenging environment for investors as they navigate through a period of economic uncertainty and market volatility.