The benchmark Straits Times Index (FSSTI) dropped 4.9 percent since Dec. 31, trailing gauges of Thai, Indonesian, Malaysian and Philippine equities by at least 1.8 percentage points. Stocks sank as data showed home purchases tumbled last year to a four-year low and retail sales dropped, while manufacturing growth weakened in China, Singapore’s biggest export market.
“The Singapore selloff is due in large part to the sputtering domestic economy,” said David Ross, Maryland, Washington-based managing director of Chevy Chase Trust Co., which oversees about $15 billion. “The weakening consumer economy portends weakness in the property segment that could send ripples through the financial system. While not the most likely scenario, the odds of a bursting property bubble are increasing.”
Singapore shares posted the third-biggest decline among developed markets this year after as much as $3 trillion was wiped from equities worldwide on concern the global economic recovery is faltering. The city’s regulators said Feb. 7 they may introduce a minimum price for stocks and impose collaterals and other restrictions for trades after a slump in the shares of three commodity companies erased $6.9 billion in market value over three days in October.