STI: -7.6% in ten days
In early May, investors were debating about whether there was a “sell in May and go away” syndrome, by end May the saying proved to be right. The STI reached its high of 3,464.79 on 22nd May – the index was previously seen trading around that range in 2008 and then saw a sharp decline. Since 22nd May, the index has tumbled 7.6% in ten trading days, to close at 3,193.51 yesterday. The selloff yesterday almost erased all of the STI’s gains this year. Incidentally, the closing price was also below the 200-day exponential moving average.

MAS Senior Advisor Goh Chok Tong said in an interview with Dow Jones Newswires yesterday that Singaporeans and businesses should be prepared for a little short-term pain while the government takes steps to be less reliant on foreign workers. He thinks it’ll take another two to three years before stability in companies is re-established, as reported by TODAY.

Singapore’s economy expanded 1.8% in the first quarter and the government has forecasted an expansion of 1% - 3% this year. In the same article, Mr Goh mentioned that “The exports, manufacturing side is difficult to predict at this stage but it is more likely to be flat. If that were the case, growth of 2% - 3% should be attainable”.

HSI on a downtrend
When compared to the HSI, the STI seems to be doing better. The HSI started the year at 22,656.9 and as of yesterday’s closing price, the index has declined 1.2%. The index made its high of 23,822.1 on 30th January after which, it failed to make a higher high.

Source: Macquarie Research - 7 Jun 2013