City Developments (CDL) fell to a low of $7.64 on Sept 28, before rebounding to $7.67 but ending at $7.61 on Sept 29. Prices are still up 11% since the start of the year, though. Still, the decline on Sept 28 caused prices to break below the 200-day moving average at $7.74. For much of this year, CDL’s 200-day moving average had been rising gradually, despite the sometimes volatile price movements. The break below the 200-day moving average took place as prices broke below a one-year uptrend.
The Straits Times Index has had a particularly turbulent week. Interestingly, the turbulence was not caused by the US Federal Reserve’s fourth hike this year, of 75 basis points (bps) on Sept 21–22. Instead, it was caused by the British Chancellor of the Exchequer’s mini Budget. Sterling fell as did 10-year gilts, while yields on the 10-year gilts surged to as high as 4.5% before retreating.
Why would gilts impact the local market? Singapore corporates were encouraged to go overseas, and the UK was an attractive destination for some. The sudden surge in yields of 10- year gilts to 4.5% (before easing), and the decline in 10-year gilts from GBP120 ($186.69) in July to GBP100 in Sept led to something of a selloff in companies with exposure to the UK.
