Corporate earnings take hit as economy slows

STI constituents posted their first profit decline in six quarters.

Bloomberg reports that Singapore's slowing economic growth has started to weigh on company earnings with companies in the benchmark Straits Times Index posting their first profit decline in six quarters in the three months ended June.

Meanwhile, 23 of the 30 stocks in the gauge saw cuts in earnings estimates after reporting quarterly results, according to a financial firm.

The Ministry of Trade and Industry earlier cut its economic growth forecast to nearly zero as US-China tensions escalate, prompting analysts to expect profits to deteriorate through the year as a result.

Also read: Technical recession risks heighten over dismal GDP growth

The benchmark stock gauge has fallen about 5% this month, getting closer to erasing its gain for 2019, however the primary index is still up 2.2% in 2019, compared with a 5.2% decline in Malaysia’s benchmark gauge, and a 1.6% advance in Indonesia’s Jakarta Composite Index.

Here's more from Bloomberg:

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