By CHUANG PECK MING
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(SINGAPORE) American investors dumped a net US$4.07 billion of stocks listed on the Singapore Exchange in the last three months of 2008 - nearly four times their net sales in the first nine months - as the financial crisis deepened at its epicentre in the United States.
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The big exit from the Singapore stock market followed a pattern for US investments elsewhere - except for the Caribbean and Latin America - and reversed a US net purchase of US$543 million in Singapore stocks in the July-September quarter, the latest figures released by the US Treasury show.
Analysts had noted that US investors with cash to spare took cover in selective markets abroad - including Singapore - in the third quarter of 2008 when the credit crunch in the US tightened.
The crisis has since grew and spread, leaving investors with few shelters in the global stock markets.
Globally, US investors pulled out a net US$42.56 billion from stock markets in the final October-December quarter of 2008, up sharply from a net withdrawal of US$17.88 billion in the previous third quarter.
Europe, which accounts for the largest chunk of US foreign stock holdings, saw the biggest US divestments - a new US$24.62 billion - during the quarter, helping to push down stock prices in the region by an average 22.74 per cent in the last three months of 2008.
US investments in Asian markets posted a negative US$19.25 billion, the second biggest US sell-off abroad. Asian share prices, excluding the Japanese, sank by 21.48 per cent on average in the same period.
Within Asia, Japan took the heaviest hit in the fourth quarter as US investors unloaded a net US$8.99 billion in the Tokyo stock market, which registered an average 9 per cent down.
Next was Singapore, where the Americans off- loaded a net US$4.07 billion in a quarter when the Straits Times Index tumbled to 1,600.28 points on Oct 24, the lowest in 2008.
US investors dumped a net US$1.35 billion of Singapore stocks in October.
The next two months saw the STI pacing up and down between 1,700 and 1,900 points, with no sign that investor confidence would be restored. US investors got rid of a net US$1.85 billion in November, and US$867 million in December.
For the whole of 2008, US investors sold a net US$5.39 billion of stocks in the Singapore market which was hammered down by 49.2 per cent, among major market falls globally.
While the fourth quarter of 2008 saw a sharp increase in US sales of Singapore stocks, US investors went easy in reducing their holdings of Singapore bonds.
After dumping a net US$4.75 billion of Singapore bonds in the second quarter and US$1.82 billion in the third quarter, US investors sold a net US$405 million in the debt instruments in the final quarter.
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