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Singapore avoids Asia short interest peaks
21 February 2014
The country’s equity market has not attracted the high level of short selling seen in Hong Kong and South Korea
Singapore has managed to avoid some of the extreme bearish sentiment in other Asian markets in recent weeks, according to data from Markit Securities Finance.
Despite the country’s main equity index falling 4%, it has not attracted the high level of short interest seen in Hong Kong and South Korea’s main indices, the Hang Seng Index and KOSPI.
Demand to borrow shares in the STI index has stayed “relatively flat” since the start of the year.
Hong and Kong and South Korea have also suffered a fall in their equity markets but unlike Singapore, these markets have large rises in short interest.
Markit noted that while 2% of average short interest in Singapore is on par with the two countries, Singapore’s short interest is concentrated in two constituents whereas the shorting in Hong Kong and South Korea is more evenly distributed.
Singapore’s government debt has also stayed resilient in spite of the country having one of the highest debt-to-GDP ratios in the Asia region.