SINGAPORE: Singapore shares closed 0.28 percent lower on Wednesday after China’s foreign exchange regulator released data showing China’s capital outflow re-emerged in July.
Banks in China sold 28.5 billion U.S. dollars of Renminbi last month on behalf of clients, versus net purchases of 9 billion U.S. dollars in June, according to data from the State Administration of Foreign Exchange. Goldman Sach Research said “the return of foreign exchange outflow likely reflected adverse sentiment from the equity market correction.” Given the capital flight, Goldman Sach believed China is unlikely to allow further significant depreciation on its currency in the coming months.
Warning that corporate earnings could decline this year, DBS Group Research said “sectors which had performed well could bear the brunt of profit taking, as investors capitalize on their outperformance to raise cash levels.”
The benchmark Straits Times Index fell 8.4 points to close at 3, 041.25 points. Trading volume was 1.51 billion shares worth 1.17 billion Singapore dollars. Decliners outnumbered advancers 325 to 137, while 478 stocks closed unchanged.
