These Singapore stocks were the most bought and sold by retail investors in volatile April

[SINGAPORE] Traders rode a wave of sharp swings in Singapore stocks in April, as tariff-driven volatility saw investors go both risk-off and return to the market to buy large dips.

The Straits Times Index (STI) fell 14.6 per cent from 3,972.43 at the end of March to 3,393.69 on Apr 9, subsequently recovering 12.9 per cent to 3,832.51 by the last trading day of the month on Apr 30.

Several stocks stood out as the most heavily bought by retail traders during the month, particularly in the financial services and industrial sectors.

Heavy swings

In the first weeks of April, announcements of tariffs on around 90 countries by US President Donald Trump – ranging between 10 and 50 per cent – sent global markets deep into the red on Apr 3. Subsequent doubling down on retaliatory responses by China, then a shock 90-day delay of the tariffs, created large whipsaw effects in indices worldwide.

The largest plunge came on Apr 7 as the index plummeted 7.5 per cent to 3,540.5, marking its heaviest single-day fall since the 2008 global financial crisis. Large retail inflows were observed during the initial plunge, with retail traders buying a net S$1.2 billion worth of stocks on the local exchange by Apr 9. Retail net buying continued for three more successive sessions until Apr 14, as traders appeared to take advantage of price weakness to buy dips.

Among the most purchased stocks were local banks DBS, UOB and OCBC, which fell more than 18 per cent at the STI’s trough on Apr 9. Retail investors also chased heavy dips on maritime stocks such as Seatrium, Yangzijiang Shipbuilding and Keppel, which suffered heavy losses at an average 19.8 per cent dive.

Overall in the month, retail traders bought a net S$1.1 billion on the exchange, with a sizeable S$1.5 billion of inflows into the financial services sector. Sales of telecommunications stocks dominated outflows with S$385.5 million, particularly Singtel, where investors took profits on its 11 per cent growth in Q1.

Institutional investors, conversely, appeared to reposition defensively as fears of “catching a falling knife” escalated. Institutions net sold S$333 million by Apr 10 from the start of the month, likely driven by defensive buying as analysts prompted investors to rotate into domestic-focused sectors on the STI.

These included stocks such as Singtel, ST Engineering, Sembcorp and ComfortDelGro, which all ranked among the top 10 institutional purchases in the month while ending the month in the green. SGX also emerged as a defensive bet in the midst of volatility, as the second-most bought stock by institutions as risk management activity spiked.

In total, institutional investors sold a net S$73.5 million, with S$589.4 million worth of financial stocks making up the largest slice of sales, as weaker loan growth outlook led research houses to downgrade their ratings on local banks. Institutions also trimmed positions in marine stocks – with Keppel and Yangzijiang Shipbuilding netting sales of S$97.4 million and S$30 million, respectively.

Across the market, Malaysian gold-mining stock CNMC Goldmine had the largest surge in trading activity, jumping 128 per cent in daily average traded value in April compared to the year’s first three months. This was followed by OKH Global and Geo Energy Resources, which both had a 51 per cent increase in traded value.

After Trump’s surprise announcement to delay tariffs by 90 days on Apr 10, there was a subsequent rebound in local stocks, with the STI rising 5.4 per cent by the close. The index’s recovery continued into the second half of the month, spending seven consecutive sessions in the green from Apr 11 to 23.

By the end of the month, the index recovered 12.9 per cent from its trough, with local banks rebounding 12.7 per cent. Overall in April, the STI declined 3.5 per cent, with dividends reducing the decline in total return to 2.3 per cent and bringing the four-month total return to 2.9 per cent, based on SGX data.

Uncertainty continues in May

Still, May and the year ahead will remain steeped in global uncertainty, experts believe. Geoff Howie, market strategist at SGX, said: “The global economic outlook is still very uncertain, and growth data and commentary from the Trump administration will be closely monitored until Jul 9.”

Some of April’s best performers, including Singtel and SGX, now stand among the counters that brokers have now cued traders to take profit on in May, by rotating out to more resilient sectors such as industrials.

“These have done well alongside the STI’s strong 13 per cent rebound from its Apr 9 low but now offer limited upside to our analysts’ 12-month target prices,” said DBS economists of the two stocks in a note on May 2. Banking stocks, as well as Singapore Airlines, were given “hold” ratings by the bank’s research house due to weaker outlooks.

Still, some remain more optimistic about the local market at large. Vasu Menon, managing director of OCBC’s investment strategy, said in a note on May 4 that local stocks are currently trading at historically cheap valuations, suggesting further upside for Singapore-listed equities in the year ahead. 

Based on consensus estimates, the STI is currently trading at a forward 12-month price-to-earnings ratio of 11.7 times, nearly one standard deviation below the 10-year average, OCBC noted. “In addition, the STI’s 5 per cent dividend yield is attractive and the highest amongst Asian bourses,” Menon said.

A Maybank strategy note indicated domestic drivers such as fiscal stimulus capacity, and a construction boom could help cushion the landing and support locally focused stocks.

“In past extreme downturns, Singapore has a history of strong fiscal stimulus and reserves drawdowns,” Maybank economist Thilan Wickramasinghe said, pointing to draws of up to 8 per cent of gross domestic product during Covid-19 and 1.5 per cent of GDP during the 2008 global financial crisis.

The note estimated that the most recent government term accumulated a surplus of S$14.3 billion. “These factors could support relatively better domestic earnings visibility,” he added.

But the strong showing by the ruling People’s Action Party after the general elections on May 3 is unlikely to impact the local market “in any meaningful or lasting way”, Menon noted. Rather, the market’s attention will turn more towards Trump’s trade policies, and the responses of global economies towards trade uncertainty in the face of recession fears.

“Nevertheless, a well-managed economy, run by a stable government, is often welcome news for investors given the current uncertain global economic environment,” he said, adding that local equities may stand to enjoy some short-term gains.