STRAITS TIMES INDEX

(STI)
The Straits Times Index (STI) comprises of the stocks of 30 representative
companies listed on the Singapore Exchange. The index is calculated based on
market-value weighted stock market index.
Correction and Recovery
 ROLE OF CENTRAL
BANK
• The Monetary Authority of Singapore (MAS)

• Unprecedented easing steps to support the country’s trade-reliant economy

• Exchange Rate instead of the Interest Rate : Lowered the midpoint of currency band and
reduced slope to zero rate of appreciation

• Household Support worth Singapore $ 100 billion

• Loan capital worth Singapore $ 20 billion to help businesses and households facing cash crunch

• Monetary measures included , a swap facility worth US$ 60 billion was announced by the MAS
with the US Federal Reserve, in order to provide USD liquidity to Singapore banks through
weekly auctions.
 Implication of Negative
Interest Rate
• No interest rate is set by the Central Bank, instead the Monetary Authority
manages the Singapore $ against a basket of currencies with key trading
partners like USA.

• Borrowing costs in Singapore track those in the USA.

• The Singapore Overnight Rate Average 0.015%,

• The Overnight Swap Offer Rate last week was at -0.045%, it being the 2 nd time this
year when it has dipped below 0, after reaching around -0.6% in late March.
 Impact of Covid on
Treasury Yields
• The Singapore 1 Year Government Bond Yield is expected to be 0.325% by the
end of December 2020.

• The Singapore 2 Years Government Bond Yield is expected to be 0.199% by the

end of December 2020.

• The Singapore 5 Years Government Bond Yield is expected to be 0.549% by the

end of December 2020.

• The Singapore 10 Years Government Bond reached a maximum yield of

2.684% (17 May 2018) and a minimum yield of 0.678% (20 May 2020).
Role of Government
The Minister for Finance presented a Support Package which includes a
range of measures to reduce the blow of COVID-19 on local businesses and
workers.:
1. Tax Measures
• Deferment of corporate income tax payment 
• Extension of tax filing deadlines
• Corporate income tax rebate 
• property tax rebate (PTR) for qualifying commercial properties
•  Delay in increasing GST
2. Employement Related Measures
• SGUnited Jobs and Skills Package
• Jobs Growth Incentive
• Enhancements to Wage Credit Scheme
3. Economic Stimulus Measures
• One-year temporary bridging loan program for enterprises
• Enterprise Financing Scheme – Trade Loan program for Singapore-
based enterprises
• Deferment of principal payments on secured term loans
• Financing support for promising start-ups
4. Sector specific Measures
• Aviation
• Tourism
• Land Transport
• Rental waivers for qualifying tenants in public properties
• Maritime
What other
important changes
have you observed
in financial or
capital markets in
2020?
Industries in focus for IPO despite COVID are

REITs and Property trusts

Healthcare and Medical technology

Technology

Protect investors from being burned

• New participants in capital market
• The Monetary Authority of Singapore
(MAS)’s efforts.
• SGX to conduct a review of the use of circuit
breakers
SGX Market Statistics for April 2020

• Total securities market turnover value on SGX rose 35%

year-on-year (y-o-y) in April to $29.6 billion.
• Securities daily average value (SDAV) climbed by 35% y-o-y
to S$1.41 billion. 
• The market turnover value of exchange-traded funds (ETF)
increased 140% y-o-y to S$469 million on the back of
strong investment interest and capital inflow to Asia.
• Equity index futures traded volume on SGX fell 25% y-o-y
in April to 12.3 million contracts. 
STRUCTURAL
CHANGES POST
COVID-19
 Sector contribution to GDP

Service sector Industrial sector Others

• The agricultural sector of the country is almost non-

existent.
• The economy of Singapore is highly industrialised. The
industrial sector represents 25.2% of GDP and employs
16.5% of the population.
• The services sector of the economy contributes 70.4%
of GDP and employs 83% of the active population.
•Travel, hospitality and leisure: Even in the new
normal in the near future, people would be less likely to
travel unless necessary. Since Singapore is known for
hosting major international events, it would have to
ensure effective implementation of safety measures to
curb the spread of the virus – which would assure
travellers, event organisers, and investors on their
decision to host potential marquee sports, business and
leisure events.
•Consumer products and Retail:The pandemic has
resulted in an increased reliance of consumers on e-
commerce which seems to be a permanent structural
change post Covid. Companies would have to
specifically think on ways to connect with their
consumers socially and experientially.
•Industrial products and construction: Post Covid,
with the Industry 4.0, the adjustments will be painful in
the beginning as companies will have to bear the high costs
of innovating their work process, upgrading equipment,
and training their workforce in the face of lower revenues,
these steps are crucial and necessary to ensure that the
sector continues to remain a key driver of Singapore’s
economy in the future.

•Health care: The impact of the current pandemic will

definitely have its toll on the productivity of the labor force
for a long period of time. Subsequently there would be
considerable change in health care spending by the
consumers.