Singapore Stocks Suffered a Bloodbath Last Friday: How Should Investors React?
As the US market plunged for two days in a row, the S&P 500 Index suffered a correction while the technology-heavy NASDAQ Composite Index plunged into a bear market.
The STI was not spared, either, as it fell nearly 3% in its biggest one-day drop since the pandemic.
Investors are naturally worried about the effects of these tariffs as they reverberate across the globe.
How should investors react to this news? Should you sell all your stocks?
The three local banks bore the brunt of the sell-off.
DBS Group (SGX: D05) tumbled nearly 4.9% to S$43.30 while United Overseas Bank (SGX: U11) fell 3.9% to S$35.46.
OCBC Ltd (SGX: O39) saw its share price slide 2.8% to S$16.62.
Shipbuilders, which are highly exposed to global trade, also slumped in tandem with the bellwether blue-chip index's decline.
Nam Cheong (SGX: 1MZ), a marine group specialising in the construction of offshore support vessels, saw its share price plunge 8.4% to S$0.53.
Yangzijiang Shipbuilding (SGX: BS6) slid 4% to S$2.17 while Seatrium (SGX: 5E2) fell 3% to S$1.94.
Although semiconductors were spared from the tariffs for now, analysts believe that the sector could be subject to another round of tariffs for specific products.
AEM Holdings (SGX: AWX) tumbled 3.1% to S$1.24 while UMS Integration (SGX: 558) saw its share price decline 2.8% to S$1.03.
Fast-growing companies such as iFAST Corporation (SGX: AIY) were not spared from the carnage.
The fintech saw its share price fall 4.1% to S$6.93 as investors fret over the pace of inflows following the comprehensive tariff announcement.
With the US market suffering a second day of selling as China announced retaliatory tariffs of 34% on all US imports, Singapore could be in for another bout of selling when the markets open on Monday.
The latest, and thus far most comprehensive, salvo from Trump seeks to upend years of free trade.
It's still early days as countries reel from the impact of these punishing tariffs.
Supply chains will be impacted and companies need time to assess the impact of these additional taxes.
These tariffs are sure to increase the cost of production and distribution and cause significant disruption to many businesses' plans.
There is also significant uncertainty as to how each country will respond to these tariffs, which are set to take effect on 9 April.
Larger economies may choose to retaliate the slam the US with its own set of tariffs while smaller nations may choose to negotiate and broker a different arrangement.
Trump says he is 'open to negotiations', signalling that these tariffs are not final and could be used as a bargaining tool for the US to gain the upper hand.
No one knows what the next move will be for the notoriously unpredictable Trump, but investors are fearing a worst-case scenario where a widening trade war may trigger a global recession.
In situations like these, it's recommended that investors keep a level head and continue to monitor and assess the developments.
While fear and panic are natural emotions that you will experience in the face of growing uncertainty, the last thing you want to do is to sell all your stocks.
Remember to check your investment thesis as to why you purchased these stocks in the first place.
Companies with strong brands, sturdy business models and pricing power should eventually rise above these tariffs and stand tall above their competition.
Yes, there will be a lot of short-term pain as companies react and adjust to the new reality of a possible trade war.
But what you, as an investor, should do is carefully monitor companies' commentaries to see how they are coping with the tariffs and the strategies they intend to use to mitigate their impact.
Stock markets go through various types of crises regularly.
There was the global financial crisis back in 2008-2009 which was triggered by sub-prime mortgages.
More recently, the pandemic also triggered a bear market as uncertainty reigned in 2020 over whether the COVID-19 virus could decimate the population.
Throughout these crises, the market plunged and then recovered as strong companies continued to soldier on.
Trump's tariffs are turning out to be a different type of crisis.
As investors, you should keep calm, assess the situation, and continue to monitor the companies within your portfolio.
With patience and tenacity, you can get through this crisis, just like how the previous ones were eventually resolved.
First-time investors: We've finally released our beginner's guide to investing. Read it in an afternoon, follow the principles, pick an investing style and buy your first SGX stocks within the next few hours! Click here to download it for free.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclosure: Royston Yang owns shares of DBS Group and iFAST Corporation.
The post Singapore Stocks Suffered a Bloodbath Last Friday: How Should Investors React? appeared first on The Smart Investor.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Post
27 minutes ago
- New York Post
Chinese state media says Nvidia H20 chips not safe for China
Nvidia's H20 chips pose security concerns for China, a social media account affiliated with China's state media said on Sunday, after Beijing raised concerns over backdoor access in those chips. The H20 chips are also not technologically advanced or environmentally friendly, the account, Yuyuan Tantian, which is affiliated with state broadcaster CCTV, said in an article published on WeChat. 'When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it,' the article concluded. President Trump banned the sales of H20 chips to China in April. AP Advertisement Nvidia did not immediately respond to a request for comment. H20 artificial intelligence chips were developed by Nvidia for the Chinese market after the U.S. imposed export restrictions on advanced AI chips in late 2023. The administration of President Trump banned their sales in April amid escalating trade tensions with China, but reversed the ban in July. Advertisement China's cyberspace watchdog said on July 31 that it had summoned Nvidia to a meeting, asking the chipmaker to explain whether its H20 chips had any backdoor security risks — a hidden method of bypassing normal authentication or security controls. Nvidia later said its products had no 'backdoors' that would allow remote access or control. In its article, Yuyuan Tantian said Nvidia chips could achieve functions including 'remote shutdown' through a hardware 'backdoor.' Nvidia has denied its products had 'backdoors' that would allow remote access or control. AP Advertisement Yuyuan Tantian's comment followed criticism against Nvidia by People's Daily, another Chinese state media outlet. In a commentary earlier this month, People's Daily said Nvidia must produce 'convincing security proofs' to eliminate Chinese users' worries over security risks in its chips and regain market trust.
The Hill
27 minutes ago
- The Hill
Trump rips Fed renovations ahead of DC ‘beautification' press conference
President Trump ripped the Federal Reserve's renovations to its headquarters Sunday ahead of a a press conference Monday addressing 'crime and the beautification' of Washington, D.C., 'The Press Conference on Crime and 'Beautification' will be held tomorrow, at 10:00 A.M. EST, in the Press Briefing Room, and it will not only involve ending the Crime, Murder, and Death in our Nation's Capital, but will also be about Cleanliness and the General Physical Renovation and Condition of our once beautiful and well maintained Capital,' Trump posted on Truth Social on Sunday. 'We are not going to allow people to spend $3.1 Billion Dollars on fixing up a building, like the Federal Reserve, which could have been done in a far more elegant and time sensitive manner for $50 to $100 Million Dollars. The Renovation would have actually been better, and we would have saved $3 Billion Dollars, Traffic Jams, and never-ending Construction,' he continued. Trump has criticized the renovations of the Federal Reserve building, blaming Fed Chair Jerome Powell amid his feud with the central bank chief over interest rates. Trump suggested and later backed away from the idea that the higher cost of renovations could be grounds to remove Powell from the Fed. Trump has openly criticized him multiple times because the Fed has not lowered interest rates due to uncertainty surrounding tariff measures. Powell has previously defended the renovations. 'The project is large in scope because it involves the renovation of two historic buildings on the National Mall and that were first constructed in the 1930s,' Powell wrote in a letter to Office of Management and Budget (OMB) Director Russell Vought on July 17. Trump visited the Fed on July 24 and claimed that renovation costs were $3.1 billion, up from the previously estimated $2.5 billion. Powell corrected Trump, saying the $3.1 million included previous works but still mentioned it was an ' honor ' to host the president. The Monday press conference comes as federal law enforcement patrol the streets of Washington, D.C., after two 15-year-old boys were arrested for unarmed carjacking and beating up former Department of Government Efficiency (DOGE) staffer, Edward Coristine, also known as 'Big Balls.' Trump has mentioned the idea of federalizing the city to combat excessive crime, even though crime rates are at a 30-year low in the nation's capital. He also signed an executive order creating a task force designated to make D.C. ' safe and beautiful.' In a different Truth Social post about this matter earlier on Sunday, Trump said, 'Be prepared! There will be no 'MR. NICE GUY.' We want our Capital BACK. Thank you for your attention to this matter!'
Yahoo
an hour ago
- Yahoo
IRS considers eliminating ability to file your taxes in language other than English
The Trump administration is reportedly considering eliminating language services at the Internal Revenue Service, a move that would make it significantly more difficult for non-English speaking individuals to file their taxes. The report comes from two individuals familiar with the plans who spoke to The Washington Post. The individuals said that the IRS is currently considering how it could comply with President Donald Trump's executive order declaring English the U.S.'s official language. The validity of that order has been questioned by some legal scholars. 'Establishing English as the official language will not only streamline communication but also reinforce shared national values, and create a more cohesive and efficient society,' Trump's order says. On July 14, Attorney General Pam Bondi issued a memo to federal agencies directing them on how to implement Trump's executive order. The memo requires officials to produce department-wide plans to "phase out unnecessary multilingual offerings" and to "consider redirecting these funds towards research and programs that would expedite English-language acquisition and increase English-language proficiency and assimilation." 'A shared language binds Americans together, transcending different backgrounds to create a common foundation for public discourse, government operations, and civic life, while leaving ample room for the vibrant linguistic diversity that thrives in private and community spheres,' Bondi wrote in the memo. Despite Trump's executive order, the U.S. has no standing law establishing English as the national language. Responding to Bondi's memo, the U.S. Treasury Department — which oversees the IRS — wrote in email responses on Sunday that the IRS would have to reevaluate its "commitment to assist non-English speaking taxpayers understand their tax obligations." The agency currently has a policy in place requiring it to serve "those who lack a full command of the English language." The Treasury also noted it would have to decide if it would keep all of its translations for more than 100 financial forms in Spanish and other languages, as well as free phone and in-person translation services. The IRS also maintains a multilingual website and Spanish-language social media accounts and programs. The move comes at a time when some non-English speaking taxpayers are fearful that the IRS may cooperate with Immigration and Customs Enforcement in its ongoing efforts to find undocumented immigrants and deport them. That fear has reportedly led to severe drops in tax compliance among immigrant communities in some parts of the country. The IRS has already renewed its contract for phone interpreter services, according to two people familiar with the issue who spoke to The Washington Post. That contract was deemed necessary by senior IRS and Treasury Department officials after DOGE demanded it review all of its contacts. The interpreter service contract was only extended for a few months and will expire before the end of the year.
