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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.