SINGAPORE'S equity party hit a high note mid-May but quickly soured once the Fed arrived, and as a new month dawned the market found that its total value had slipped to $955 billion.
Singapore's total market capitalisation as at end-May slipped 0.2 per cent from April's $957 billion, but that was after coming off intra-month highs.
The Straits Times Index (STI) had set an all-time closing high of 3,454.37 on May 22, but overnight policy minutes by the US Federal Reserve and comments by Fed chairman Ben Bernanke sent stocks tumbling a day later amid expectations of a slowdown in monetary stimulus. The hang-over has been epic, with the STI closing at 3,311.37 yesterday.
Singapore Telecommunications remained Singapore's largest stock, with a month-end market cap of $59.8 billion, down 4.6 per cent month-on-month.
The top 10 largest stocks remained unchanged, except for grocery store operator Dairy Farm International Holdings, which leapfrogged commodities trader Wilmar International and developer Hongkong Land to take the eighth spot.
The billion-dollar club shrank by two members, to 112 counters.
Real estate investment trusts (Reits) Cache Logistics Trust, Cambridge Industrial Trust and Frasers Commercial Trust saw their market caps fall below $1 billion, while newly listed Asian Pay Television Trust made its debut in the club with a $1.3 billion month-end market cap.
Reits were among the hardest hit in the wake of the Fed minutes.
"Most sectors were down for the month, with just a handful of sectors enjoying minor gains," said Carmen Lee, head of OCBC Investment Research. "The key outperformer was the Consumer Goods Index, up 4.6 per cent. The hardest sectors hit were the property, Reit, telecommunications and the mid-cap stocks, as seen from the losses of between 5 and 9 per cent for the indices."
Ms Lee said market jitters remain despite the recent selldown.
"On a price-earnings ratio basis, it is around 14.9 times. On a price-to-book basis, it is around 1.4 times," she said. "These are not demanding valuations. However, the market remains worried about the possible withdrawal of liquidity from the system."
Quality names could benefit from the consolidation, however.
"We see this correction as healthy with Singapore equities positioning themselves to re-enter the market on price weakness, especially for quality stocks," Ms Lee said. "The banking sector is likely to benefit from any increase in interest rates. We remain overweight on the oil & gas stocks and selective blue chips."
