Welcome to this special issue of the Singapore Edition newsletter.
I’m John Cheng, Asia stocks reporter in Singapore, with a roundup on the market turmoil in our region triggered by US President Donald Trump’s shock tariff announcements last week. Sign up here for future editions. Lower down, I’ve added links to our best coverage from across Asia Pacific and world.
Tariffs Test City-State’s Haven Status
Singapore’s status as an oasis of stability in times of crisis is being severely tested, as traders grapple with the worst stock selloff since the Global Financial Crisis.
The Straits Times Index Monday fell 7.5%, in its biggest drop since Oct. 2008, with all 30 members of the benchmark in the red. True, Singapore isn’t the worst performer in Asia Pacific: Hong Kong’s Hang Seng Index tumbled 13% and Taiwan’s Taiex slid 9.7%. But the extent of the drop in the city-state caught many local investors off guard, given that our equities are frequently touted as stable and defensive.
“We see panicky sentiment even in Singapore, with stocks like United Overseas Bank opening nearly 20% down, something unheard of,” said Nigel Peh, a portfolio manager at Timefolio Asset Management. “It must have been serious risk control, panic selling and capitulation.”
An abundance of high-dividend paying stocks combined with a $3.7 billion government investment plan to help increase liquidity and local listings have supported demand for the island’s equities, elevating them among the best performers in Asia this year — until last week. Now, traders are focusing on the knock-on effects of Trump’s rising tariffs on our relatively small and trade-dependent economy.
Things may get worse. As investors price in more aggressive interest-rate cuts by the Federal Reserve, Singapore’s benchmark index “appears particularly vulnerable due to its heavy banking sector exposure,” Jun Rong Yeap, market strategist at IG Asia, wrote in a note. The Monetary Authority of Singapore — which uses the exchange rate as its main policy tool rather than interest rates — could also further ease its policy settings on April 14.
But, as we reported earlier in this newsletter, there may be a thin silver lining — for now. Singapore got off lightly in Trump’s tariff blitz, with just the minimum 10% tariff on exports to the US, lower than other Southeast Asian peers like Vietnam, Indonesia and Malaysia. That means the nation may benefit as companies diversify away from the more heavily tariffed countries, and may see increased activity as a transshipment hub.
For brokerages including Morgan Stanley and JPMorgan, Singapore stocks are still among the better places to hide in Asia as traders navigate the tariff fallout and await further tit-for-tat moves in the coming days.
Catch Up on Other Top Tariff Stories
A selection of the best of Bloomberg storytelling, from podcasts and video to explainers and feature stories covering the tariff fallout.