SINGAPORE (Apr 1): The benchmark Straits Times Index (STI) dipped 1.26% on Wednesday morning, as volatility continued to grip the global financial markets.
This comes after a rocky start to the week, when Singapore’s central bank took unprecedented easing steps to support a trade-reliant economy being slammed by the coronavirus outbreak.
The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool rather than a benchmark interest rate, lowered the midpoint of the currency band and reduced the slope to zero. That implies the central bank will allow for a weaker exchange rate to help support export-driven growth and to ward off deflationary threats.
The drop in the Index had threatened to erase gains last week after Singapore unveiled a second stimulus package worth $48.4 billion to give the economy a shot in the arm against the Covid-19 pandemic.
The Resilience Budget came amid the biggest contraction in Singapore’s economy in a decade.
For 1Q2020, gross domestic product fell 2.2% year-on-year, faring worse than the median forecast of a 1.4% decline in a Bloomberg survey of economists.
On an annualised quarter-on-quarter basis, 1Q GDP fell 10.6% from the previous three months, missing the median forecast of an 8.2% decline.
Notably, a surprise decision by the US Federal Reserve on March 15 to slash interest rates had failed to calm the global financial markets. But now, more central banks have joined in with moves to ease liquidity.
Investors had started fleeing for cover after the World Health Organization on March 11 declared the novel coronavirus (Covid-19) outbreak a pandemic.
Amid the uncertainty stemming from Covid-19 as well as other geopolitical events such as the Saudi-led oil price war which saw the collapse of oil prices on March 9, The Edge Singapore is keeping track of the component stocks on STI, a capitalisation-weighted stock market index that tracks the performance of the top 30 companies listed on the Singapore Exchange (SGX).
This valuation table will be updated at noon each day.
