Straits Times (STI) Index pares gains a day after reopening announced

Singapore blue-chip stock benchmark Straits Times Index (STI Index) shot up 2.4% overnight on Monday 15 June 2020, after the government unexpectedly eased its lockdown measures.

29 of 30 STI stocks gained on Tuesday following reopening reveal

On Monday, the Singapore government announced that it would be moving to a so-called ‘phase two’ of its reopening plans starting from Friday 19 June.

As at the close of Tuesday 16 June’s session, the index has retraced Monday's late-night gains slightly, but is still trading nearly 1% above the week’s opening price.

Of the 30 companies listed on the STI, 29 saw their share prices rally on Tuesday.

Top performing STI stocks included: Capitaland Commercial Trust (+6.4%); Capitaland Mall Trust (+4.9%); SATS (+4.52%); ComfortDelGro (+3.8%); and Mapletree Logistics Trust (+3.76%).

The only loss-making stock of the day was Jardine Matheson Holdings, whose share price fell 1.16%.

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Phase 2: Most retail and F&B outlets to reopen

As part of phase two, a majority of retail and food and beverage businesses may reopen their physical outlets. Food and beverage dine-in will also be allowed to resume, subject to liquor sales and consumption ceasing at 2230 hours.

However, live music and television and video screenings will not be allowed in all F&B outlets at this stage. Larger public venues with high human traffic such as malls and large standalone retail outlets will be subject to capacity limits, and operators will be required to prevent crowds or long queues from building up within and in the immediate vicinity of their premises.

Personal health and wellness – including gyms and public swimming pools, and home-based services will also be allowed to resume. Registered clubs and societies will be allowed to operate at their registered premises.

Safe distancing principles, including the observance of at least one metre between at all times between individuals, are still expected to be followed.

Additionally, small-group public gatherings of up to any five persons can also resume. Within the home, households may receive up to five visitors at any one time.

Sentiments also buoyed by US central bank’s bond purchase

IG Asia market strategist Pan Jingyi said that while the reopening news had given the STI Index a good boost, ‘the local market remains largely externally driven’, with investor sentiments also buoyed by US Federal Reserve-induced positivity.

On Monday, the US central bank said it will start purchasing individual corporate bonds on Tuesday through the secondary market corporate credit facility (SMCCF). US President Donald Trump was also reportedly mulling the possibility of a US$1 trillion infrastructure spending plan to boost the economy.

As Pan further noted, although the lending programme had already been made known earlier to the public, the ramping up of bond purchase is being viewed positively by markets positively, as it reflects the Fed’s support for financial markets.

Looking ahead for the rest of this week, Pan postulated that the Fed’s latest move has ‘marked a drastic change in tone for markets’, one that will likely aid Asia markets in clawing back last week’s losses.

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