Singapore’s dollar, stocks slide on disappointing growth outlook

Singapore’s dollar and equities fell

on Wednesday, after the country projected a slowdown in economic

growth next year even as its inflation came below forecast,

while investors awaited minutes of the U.S. Federal Reserve’s

last policy meeting.

The Singaporean dollar lost 0.4% after the city-state

forecast growth would slow to between 0.5% and 2.5% in 2023 from

about 3.5% this year.

“We think a ‘two-sided economy’ will become more stark in

2023. Some of the reopening sectors, like hospitality, aviation,

F&B and construction, will expand at a healthy pace, even as

manufacturing and external-oriented sectors contract,” Maybank

analysts wrote in a note.

Stocks were down 0.1%, after falling as much as 0.3%

earlier, after data showed that Singapore’s key consumer price

gauge rose 5.1% in October, slightly less than forecast and

below the previous month.

“Despite rising recessionary risk, we expect the MAS to

tighten monetary policy again in April 2023, probably via

another re-centering, to reduce intensifying core inflation

pressures amid a tight labor market,” the Maybank note added.

Singapore had tightened monetary policy last month for the

fourth time this year to combat inflation, which is running near

a 14-year peak.

Other regional currencies were mixed while the U.S. dollar

steadied ahead of minutes of the Fed’s recent policy meeting as

investors looked for more clues on the bank’s stance on future

rates.

Philippines’ peso and the South Korean won

gained 0.2% and 0.3%, respectively, while Thailand’s baht

and India’s rupee each eased 0.2%.

Stocks in Malaysia fell 0.1%, extending their

decline for a third day as the wait for a new prime minister

dragged on, after the leading two contenders failed to secure a

majority and break a hung parliament.

The ringgit added 0.1%.

Malaysia’s king is due to pick a new prime minister and a

special meeting of the country’s Council of Rulers, which groups

the heads of the country’s nine royal houses, will be held on

Thursday to discuss the formation of a new government.

Equities across the region firmed. Stocks in Manila

rose over 1% to their highest level in two months. Thai

and Indonesian stocks gained 0.5% each.

“Valuations in many areas are now cheap, sentiment towards

Asian equities is already depressed, and any improvement in the

macroeconomic backdrop could spark a sharp rally from current

levels over the medium term,” Schroders analysts said in a note.

HIGHLIGHTS

** Ayala Land Inc and SM Investment Corp

are top index gainers in the Philippines

** Singapore’s 10-year benchmark yield is up 0.4 basis

points at 3.091%

** Top losers on the Singapore STI include Keppel DC

REIT and Mapletree Logistics Trust

Asia stock indexes and currencies

at 0641 GMT

COUNTRY FX RIC FX FX INDE STOCKS STOCKS

DAILY % YTD % X DAILY YTD %

%

Japan -0.08 -18.5 <.n2>

China 6 EC>

India -0.18 -9.15 <.ns ei>

Indonesi -0.03 -9.24 <.jk a se>

Malaysia +0.04 -8.94 <.kl se>

Philippi +0.16 -10.9 <.ps nes i>

S.Korea 6 11>

Singapor -0.40 -2.47 <.st e i>

Taiwan -0.05 -11.3 <.tw ii>

Thailand -0.26 -7.70 <.se ti>

(Reporting by Himanshi Akhand in Bengaluru; Editing by Rashmi

Aich)