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Singapore Market Back In The Red

StockMarketBoardSingapore’s benchmark index, the Straits Times Index (SGX: ^STI), is back in the red for the year. It closed at 3,088 points on Friday, down 2.5% year-to-date.

In June, the STI entered negative territory for the first time this year on fears that the US Federal Reserve might slow down the injecting of monetary steroids into the market. A quick rebound in July brought the index back into the black. However, the latest fears, possibly due to the weakening of currencies in Asia, have sent the STI back into the red again.

It seems that traders are afraid that the impending tightening of monetary policy in US could hurt India and Indonesia’s economies hard due to their widening current account deficits and slowing economic growth.

The Indian rupees this week hit another low against the dollar, despite policymakers adopting new measures to control the sliding currency. Meanwhile, the Jakarta Composite Index has fallen about 20% since reaching a record high in June. The loss has already wiped out all the gains booked earlier in 2013. The Indonesian rupiah fell to a fresh four-year low against the US dollars.

There are talks that we could see a repeat of the 1997 Asian Financial Crisis. This was when the Thai government failed to defend its currency from speculative attacks. The crisis quickly spread to Indonesia and the rest of Southeast Asia. Thailand has already entered recession for the first time since the global financial crisis in 2009.

Shares associated with the economies of Indonesia, India and Thailand were hit hard this week. Here are three companies that have fared badly.

Sinar Mas Land Limited (SGX: A26) plunged 15.2% this week. It is one of the largest and most diversified property companies in Indonesia. It owns around 10,000 hectares of strategic land bank (as of 2011) in Indonesia with projects in city development, township, residential, commercial, retail, industrial estates, and hospitality properties, including property related service.

Shares in Religare Health Trust (SGX: RF1U) were down 8.8%. for the week. It is the first business trust with healthcare assets in India to be listed in the Singapore. The trust comprises 11 clinical establishments, four Greenfield clinical establishments and two hospitals located across India.

Thai Beverage Public Company Limited (SGX: Y92), the leading beverage producer in Thailand and one of the largest beverage producers in Asia, dropped 11.3% for the week. The company also went ex-dividend today.

The markets may be volatile but this might provide a good opportunity to buy stocks that you have always wanted to own. Having a long-term investing horizon of five to ten years or even longer can help. If you are investing for the long term, you are unlikely to even remember this week’s 3.4% drop in the Singapore shares a few years’ time.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.