SGX Market Summary: Global Shocks and Market Turbulence in October 2023 – What You Need to Know?

November 9, 2023

Amidst global shocks and rising tensions, Singapore’s stock market faced a challenging October 2023, with the Straits Times Index (STI) taking a hit. But there is more to the story – discover how economic data, inflation, and property trends played a role in this month’s rollercoaster ride for investors.

Singapore’s stock market, represented by the Straits Times Index (STI), experienced a selloff in October 2023, with a significant drop of 149.67 points, or 4.65%, from the previous month’s closing at 3,067.74 points. While the month had its fair share of challenges, it is essential to dive into the details to grasp the full picture.

Here are some of the key developments investors should take note of.

Global Influences and Geopolitical Risk

The US Federal Reserve’s consistent hawkish stance on inflation sent ripples through global markets, impacting sentiments in Singapore. Softer economic data from China added to the concerns, and the escalation of conflicts in the Middle East further heightened geopolitical risks, which cast a shadow over the local market.

Trade Data and Forecasts

Singapore’s non-oil domestic exports (NODX) for September 2023 fell by 13.2% year-on-year, though it was better than the -15% YoY forecast by Bloomberg consensus. On a seasonally adjusted basis, NODX showed surprising strength, rising by 11.1%, compared to a Bloomberg consensus forecast of 3.2%. Both electronic and non-electronic segments improved in September, although they remained in negative territory.

However, it is worth noting that the economic landscape is still challenging. The forecast for Singapore’s CY23 NODX has been revised downward to -15%, from the previous -10%.

Inflation and Economic Outlook

Inflation edged up slightly, with September 2023’s Consumer Price Index (CPI) coming in at 4.1% year-on-year, driven by lower food inflation offset by higher private transportation costs. The inflation forecast for 2023 has been revised upward to 5%, reflecting expectations of elevated prices persisting throughout the year, primarily due to supply shocks.

Property Market Trends

In the Urban Redevelopment Authority’s (URA) Q3 2023 data release, several interesting trends emerged. Private residential home prices and rental costs rose by 0.8% quarter-on-quarter (QoQ), while office space prices saw a similar increase of 0.8% QoQ, driven by higher volumes. Retail spaces also experienced modest gains.

Market Flows and Movers

October’s sell-off was widespread, with all sectors ending in negative territory. Telcos, Financials, and Technology saw relatively milder declines, while Utilities, Oil & Gas, and Industrials took the brunt of the losses. Institutional investors were net sellers for four consecutive weeks, with outflows from REITs being the heaviest. Conversely, retail investors were net buyers across sectors, except for Technology, with the highest inflows observed in REITs, Industrials, and Financials.

The Big Picture

October 2023 has been a month of challenges and opportunities for Singapore’s stock market. Global shocks and geopolitical tensions have cast a shadow, but surprising resilience in economic data and property trends provides a ray of hope. Investors need to stay vigilant and adapt to the changing landscape as they navigate the complexities of SGX in the coming months.

In summary, October 2023 was a rollercoaster ride for SGX investors, marked by global shocks, economic data surprises, rising inflation, and intriguing property market trends. For investors looking for stock ideas, our curated list of ‘5 Top Singapore Stocks to Buy in November 2023’ could serve as a compass. Given the market’s fickle nature, a well-informed and nimble investment approach remains key to mastering the prevailing market uncertainties.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

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Billy Toh

Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.

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