Singapore shares sink further on Friday, STI falls 1.7% on the week

ASIAN equities fell again on Friday as mid-week confidence - driven by monetary and fiscal stimulus measures by governments to tackle Covid-19 - dissipated.

With fears mounting over the possibility of a worldwide recession, worst-case scenarios of a sustained spread in Europe and the US are starting to be priced in, AxiCorp chief market strategist Stephen Innes noted.

The negativity across equity markets in Asia did not surprise Oanda's Asia-Pacific senior market analyst, Jeffrey Halley. He felt sentiment currently reflects "the state of the world right now" instead of "rallies built on foundations of sand" after the US Federal Reserve lowered rates on Tuesday.

On Friday, the Straits Times Index (STI) lost 57.29 points or 1.9 per cent on the day to finish at 2,960.98 - the first time it closed below 3,000 since late October 2018.

This week, the blue-chip index plunged 50.1 points or 1.7 per cent from Feb 28's close of 3,011.08.

Elsewhere in the Asia-Pacific, Australia, China, Japan, Hong Kong, Malaysia, South Korea and Taiwan all closed with losses. Of the lot, Australia's ASX 200 fared the worst, skidding 179.5 points or 2.8 per cent to 6,216.20, near an 11-month low.

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With equities on the slump, rotation in safe havens such as gold resumed. Spot prices for the yellow metal traded as high as US$1685.60 per ounce during the Asian session. It is having is best weekly gain since late October 2011.

With investors ditching risky assets, the local market continued to see above average activity. Trading volume in the city-state stood at 1.38 billion securities, 17 per cent over the 2019 daily average. Total turnover was S$1.63 billion, 54 per cent over last year's intraday mean.

Decliners trumped advancers 362 to 137, while 27 of the STI's 30 constituents closed in the red.

Yangzijiang Shipbuilding was the STI's most active counter and best performer, managing to stave off the broad market sell-off. Shares in China's largest non-state shipbuilder jumped 4.5 Singapore cents or 5.2 per cent to 90.5 cents. 

On Friday, reports emerged that Yangzijiang received containership orders worth more than US$800 million from investment firm Tiger Group.

Separately, DBS Group Research analyst Ho Pei Hwa said in report on Friday that Yangzijiang shares have been "overly penalised by macro concerns" and its current low valuation is "unwarranted".

She added that the stock is trading below its net cash value of S$1.05 per share and trading at a 40 per cent discount to regional peers. 

Singapore banks continued to decline. DBS Group Holdings fell S$0.60 or 2.5 per cent to S$23; OCBC Bank lost S$0.21 or 2 per cent lower at S$10.21, and United Overseas Bank finished at S$23.20, down S$0.54 or 2.3 per cent.

The banking trio closed at their respective 52-week lows on Friday along with fellow index heavyweight Singtel, which fell S$0.04 or 1.3 per cent lower at S$2.95.