ASIAN bourses ended a week to forget with more losses yesterday, as the spectre of more policy tightening from China continued to weigh down sentiment.
Investors continued to sell off equities on fears that the People's Bank of China could come up with more hawkish moves like that unveiled on Friday last week, when it raised banks' required reserve ratios by half a percentage point.
Thursday's news that China's economy grew at a higher-than-expected 9.8 per cent in the fourth quarter with inflation easing only moderately last month also added fuel to the speculation that further moves to combat inflation could be in the pipeline.
News from the United States has also been disappointing, with weak results from Goldman Sachs this week pulling down Wall Street.
Amid this gloom, Hong Kong's Hang Seng Index fell 0.53 per cent yesterday and Singapore's Straits Times Index (STI) followed suit with a decline of 0.65 per cent, or 20.88 points, to 3,184.60. Both Hong Kong and Singapore have lost value in four out of five trading days this week.
Significantly, the STI's decline of 1.9 per cent this week has lopped off all the gains notched up earlier this month. The index is now 0.17 per cent below its value of 3,190.04 at the tail end of last year.
Bourses in mainland China have fared even worse. Shanghai recovered 1.41 per cent yesterday, but is still in the red after plunging 3 per cent on Monday after the rise in banks' required ratios. It is down 3.3 per cent for this year, and China's secondary bourse in Shenzhen has slumped 8.73 per cent this month.
Investors' fears are summed up by a report by UOB Economic Treasury Research on Thursday, which said: 'The data from the GDP report, Consumer Price Index and Producer Price Index, and monetary statistics suggest the underlying (growth) trend remains firm despite some slowing, and that means there is room still for China to tighten monetary policy further.'
In Singapore, this meant that losses cut across industries as 19 counters in the 30-member STI fell yesterday. Six counters rose with five closing flat.
'People were concerned about holding their stocks over the weekend,' said remisier Desmond Leong.
'Recently, China has been making policy-tightening announcements during weekends.'
Commodity plays, highly sensitive to cooling measures in resource-hungry China, declined. Noble Group fell seven cents to $2.20 while Golden Agri-Resources slid three cents to 71 cents. Olam International shed five cents to $3.11; Wilmar International lost one cent to $5.57.
Rig-builders, which depend heavily on a healthy global economy and strong offshore industry, also fell. Keppel Corp shed 14 cents to $11.36 and Sembcorp Marine slid three cents to $5.25.
The banks ended mixed. OCBC Bank lost five cents to $9.95 and United Overseas Bank slid four cents to $19.30, but DBS Group Holdings managed to put on six cents to $14.82.
Amid the weakening risk appetite, some investors flocked to real estate investment trusts, which promise more regular, stable payouts. This helped the FTSE ST Reit Index to defy the negative sentiment and edge up 0.34 per cent.
CapitaMall Trust gained two cents to $1.91. It announced a less-than-forecast 1.4 per cent year-on-year drop in distributable income for the fourth quarter.
Mapletree Logistics Trust (MLT) rose 1.5 cents to 99.5 cents, after it posted fourth-quarter distributable income growth of 16 per cent to $36.8 million.
An OCBC Investment Research note said MLT's results 'were boosted by positive contributions from recent acquisitions, lower vacancy rates and further positive rental reversions across its portfolio'.
'In line with our 'overweight' rating for the industrial Reits sub-sector, we think MLT will continue to ride on Asia's recovery cycle.''
The Singapore Exchange was another gainer, adding five cents to $8.60. This week, SGX said that all-day trading will kick off in March, while Hutchison Whampoa unveiled plans to list a mega business trust here. Both developments are expected to raise trading volumes for SGX.