October 2022 Performance
Combating inflation continued to be at the forefront of most Asian central banks’ monetary policies in October, and the Monetary Authority of Singapore (MAS) was no exception. On a year-over-year basis, the MAS Core Consumer Price Index (CPI) climbed to 5.3% in September from 5.1% in August due to greater increases in prices of food, services and retail & other goods.
To stifle persistent price pressures, MAS tightened monetary policy for the fifth time in the past 12 months (by re-centering the mid-point of the Singapore dollar nominal effective exchange rate [S$NEER] policy band to its prevailing level while keeping its slope and width unchanged).
As inflation and recession fears loomed, the Dow Jones Singapore Index lost 1.06% this month and was down 18.46% YTD, on track to post its worst annual performance since 2011 (-18.64%).
The iBoxx SGD Overall gained 0.29% this month, but dropped 8.78% YTD, taking a second breather from its downtrend this year (the first reprieve was in July 2022 when the MAS also re-centered the mid-point of the S$NEER policy band). The modest positive return was due to the 1.4% gain from sovereign bonds (which make up more than 60% of the index by market value) but suppressed by the 1.62% loss from non-sovereign bonds.
