SINGAPORE – The local bourse closed lower on Aug 26 amid a regional sell-off triggered by US President Donald Trump\u2019s unprecedented dismissal of Federal Reserve official Lisa Cook. The benchmark Straits Times Index (STI) dropped 0.3 per cent or 12.78 points to 4,243.71. Across the broader market, decliners outnumbered advancers 299 to 243, after 1.6 billion securities worth $2 billion changed hands.<\/p>\n
Regional bourses were deep in negative territory. Japan\u2019s Nikkei 225 was down 1 per cent, Hong Kong\u2019s Hang Seng Index dropped 1.2 per cent and South Korea\u2019s Kospi fell 1 per cent.<\/p>\n
Nonetheless, the Singapore market\u2019s defensive strengths came into focus as an upgrade by Julius Baer highlighted the mainboard\u2019s attractive yields, reasonable valuations and the Singapore dollar\u2019s safe-haven status, justifying a new \u201coverweight\u201d rating for SGX equities.<\/p>\n
\u201cWe have turned positive on Singaporean equities after waiting for two years,\u201d wrote Julius Baer\u2019s equity research analyst of Asia Jen-Ai Chua in a note on Aug 26.<\/p>\n
\u201cIn a world of increasing geopolitical uncertainty, we believe that the Singaporean market warrants a second look, given its defensive income attributes, reputation for good governance, and the Singapore dollar\u2019s longstanding track record of strength and stability.\u201d<\/p>\n
Ms Chua highlighted that the mainboard posted year-to-date price returns of 12.5 per cent in local-currency terms and 20 per cent in US-dollar terms, remaining strong since its historic high in July.<\/p>\n
\u201cIf dividends are included, total returns swell to 17 per cent and 25 per cent in local- and US-dollar terms respectively, making it the best-performing market in South-east Asia,\u201d added Ms Chua. <\/p>\n
Meanwhile, as Mr Trump\u2019s threat to Fed\u2019s independence put the greenback under pressure, the Singapore dollar has emerged as a safer alternative.<\/p>\n
\u201cAs Singapore is the only Asian country with triple-A ratings from all three major credit rating agencies, the Singapore dollar has served as Asia\u2019s go-to safe haven during crisis periods like the Asian financial crisis, global financial crisis and Covid-19, and warrants a closer look by investors reconsidering their exposure to the US dollar,\u201d said Ms Chua.<\/p>\n