Singapore markets experienced a gloomy 2Q20 as the Straits Times Index (STI) closed August flat at 2,532.51 pts. This represented a marginal 2.7 pts increase m-o-m as investors were sombre amid gloomy economic data and poor visibility due to the Covid-19 pandemic. 

GDP for the quarter contracted 13.2% y-o-y, a disappointment compared to both house and consensus forecasts. The cause for this pessimism was weaker manufacturing (-0.7% y-o-y) and construction (-59.3% y-o-y) activity. The circuit breaker was particularly damaging for transport (-39.4% y-o-y) and retail trade and business services (-13.4%), while weak job security saw consumers tighten their purse strings, with private consumption down 28.8%. 

While there was some cause for optimism as non-domestic oil exports rose 6% y-o-y versus consensus estimates of 4.2% y-o-y, total volume of trade fell 8.9% y-o-y as total exports and imports fell. Non-electronic exports rose 6.9% as pharmaceutical exports offset a drop in petrochemical demand. August earnings releases continued July’s dour note, with earnings disappointments overshadowing surprises by a ratio of 3:1. 

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