Singapore hits record high for 14th session, sets the pace for Asian equities
Singapore's equity benchmark scaled an all-time high for the 14th consecutive session on Monday, buoyed by strong inflows to high-yield stocks, while bourses elsewhere in emerging Asia also began the week on a largely positive note.
Most regional currencies slid against the U.S. dollar: the Indonesian rupiah and the Philippine peso weakened about 0.4% each, while South Korea's won, Taiwan's dollar, and Thai baht slipped marginally.
An MSCI gauge of global emerging market currencies also declined, now down more than 1% since hitting an all-time high on July 3.
Singapore's FTSE Straits Times Index climbed for an 11th consecutive session, its longest winning streak on record, and rose as much as 0.9% to 4,225.790 points.
The benchmark index was driven by a rally in banks, telecoms, and industrial firms. Analysts say the city-state's equity market has emerged as a relative safe-haven asset amid rising global risks, with ample liquidity, a strong local currency, and low interest rates boosting appetite for attractive dividend yield.
"Low interest rates and a lack of alternative yield instruments are likely to continue supporting market activity (in Singapore)," DBS analysts said, adding that a recovery in wealth management will offer medium-term tailwind for Singapore banks.
Defensive stocks are gaining appeal among global investors who seek stability amid ongoing uncertainty over U.S. trade policy and macroeconomic challenges.
Singapore's economy also surprised to the upside last week, reporting faster-than-expected second-quarter growth and a 13% jump in exports for June, further reinforcing bullish sentiment.
Across the rest of Southeast Asia, equities held largely firm: Indonesia's benchmark index jumped as much as 1% and continued to hover around its mid-December 2024 highs, while stocks in Manila and Seoul climbed 0.7% and 0.4%, respectively.
The MSCI index of equities in emerging Asia slipped 0.2%, but has gained more than 2% this month, outperforming the broader Asia-Pacific equities index, which includes Japan, which is up only 0.3%.
After last week's rate cut in Indonesia, markets are now waiting for the next catalyst, most likely growth data due early next month, said Fakhrul Fulvian, chief economist at Trimegah Securities.
He warned that the absence of near-term triggers could cap further upside.
Thailand's SET Index climbed nearly 1% but turned negative within an hour of opening. The gauge has risen more than 10% so far this month, outperforming its regional peers after clocking deep losses in the first half.
Investors in Asia continue to keenly scrutinise tariff headlines ahead of an August 1 deadline to strike a deal with Washington.
Local sentiment has improved after Vietnam and Indonesia reached an agreement on export levies, although final details are yet to be confirmed.
In the Philippines, President Ferdinand Marcos Jr is set to visit the United States this week to secure a trade agreement with Washington.
The U.S. earlier this month raised tariffs on exports to 20%, up from 17% threatened in April.
HIGHLIGHTS:
** Indonesian 10-year benchmark yield falls 2.9 bps to 6.522%
** ST Engineering and DBS at record high, Singtel at mid-August 2016 high
** South Korea reviews various options to improve North Korea ties
** Japan's shaky government loses upper house control - Reuters
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