Singapore Market’s Profile Rises, Stocks Decline

Stocks were down, but the tilt towards Asia continues

After setting a new high on Monday, Singapore stocks took a bit of a breather for the rest of the week. The Straits Times Index declined 0.26% on Friday, for a weekly loss of 0.89%.  Elsewhere in Asia:


Weekly Gain

Price-to-Earnings (Feb. 8)*

Nikkei 225



Hang Seng Index (INDEX: ^HIS)



Shanghai Stock Exchange Composite Index



BSE Sensex



*Normalized earnings per share. Source: S&P Capital IQ  

Even as tough new amendments to the Casino Control Act are imminent (they have already been approved by the parliament), the best-performing member of the Straits Index was casino operator Genting Singapore (SGX:G13.SI), which gained 4.9% on the week. Last Friday, the Casino Regulatory Authority of Singapore announced that it was renewing the gambling license of Resorts World Sentosa, one of the company’s properties, for three years. The shares are also the front-runner in the index on a year-to-date basis, with a 12.3% gain.

Meanwhile, shopping mall developer and owner CapitaMalls Asia (SGX:JS8.SI) brought up the rear, with a 6.2% weekly loss; the company announced a 10% year-on-year decline in fourth quarter profits on Thursday. Despite the drop, the shares continue to trade at higher multiples than they did between the second half of 2011 through 2012, whether it be on the basis of price-to-book value or price-to-earnings.

Finally, in a development that is symbolic of the shift towards Asia in global finance, Singapore Exchange (SGX: S68.SI) (SGX) is in talks to acquire a partial interest in LCH.Clearnet, alongside the London Stock Exchange, which is set to take a controlling interest in the major London clearing house. Clearing houses act as a central counterparty that sits between buyers and sellers, guaranteeing all transactions. LCH.Clearnet already has ties to SGX through a project to trade London and Singaporean blue-chips on each others’ exchanges – an investment would cement the ties between two organizations. Last year, Hong Kong Exchanges and Clearing bought the London Metal Exchange.


This article was written by Alex Dumortier.  Alex Dumortier is a contributor.

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