Business

Singapore stocks get the blues

Trading on STI ends 0.46 points lower, dulled mostly by banking stocks

They do not call it the Monday blues for nothing. Now, the local market would be a classic example of that, with shares ending slightly lower on the back of depressing earnings news from Singapore's largest lender, even though Wall Street closed at record highs over the weekend.

The benchmark Straits Times Index (STI) finished down 0.46 points or 0.01 per cent to close at 3,381.85, mainly dragged by banking stocks.

Turnover for the day was 2.7 billion valued at $1.3 billion, working out to an average of $0.48. Excluding warrants, the advance-decline score was 209 to 239.

DBS Bank and OCBC Bank chalked up losses of a combined 6.9 index points yesterday. DBS, whose counter took a beating, lost 18 cents to finish at $22.79. OCBC shares retreated by nine cents to end at $11.72, while United Overseas Bank was down one cent at $24.76.

DBS reported that its earnings fell 25 per cent for the third quarter from a year ago to $802 million as the bank almost doubled its specific provisions for bad debts. Excluding one-time items such as a $21 million ANZ integration cost, net profit stood at $822 million, 23 per cent lower from the preceding period.

Ms Jingyi Pan, analyst at IG, said in her morning note that DBS has been troubled by the "lingering bad debt from the oil and gas sector", though the bank seemed to have attempted a boost to its allowances to move past the episode.

"While this may bode well for future growth trajectory, this lift in provision could take a short-term toll on share prices and local indices."

The index was, however, lifted by shares of electronics provider Venture Corporation.

The stock soared $2.69 or almost 14 per cent to end at $21.99, on a volume of nearly four million. This, after it released a stellar set of third-quarter results on Friday, blowing past analysts' consensus.

Cosco Shipping International has launched a $490 million cash buyout of Cogent Holdings at $1.02 a pop after divesting its shipyard business.

The news reported over the weekend pushed Cosco's stock up 5.5 cents yesterday to $0.355, with 38 million units changing hands, making it among the most active counters.

Heavy trading could also be seen in the shares of real estate and consumer business investment firm Yoma Strategic Holdings, whose shares closed at $0.545, down four cents.

It had said over the weekend it had closed a placement exercise to raise about $82.2 million.

Energy stocks were in play earlier in the day amid the anti-corruption crackdown in Saudi Arabia launched by Crown Prince Mohammed Salman. Saudi Arabia is the world's second largest crude oil producer, the biggest crude exporter and has the most spare production capacity of any oil-rich nation.

The blues also spread across the region. Tokyo's Nikkei and Hong Kong's Hang Seng ended the day flat while Seoul's Kospi closed lower. Both Australian shares and New Zealand stocks ended the day marginally lower.

Mr Philip Wee, strategist at DBS Group Research, said New York Fed president William Dudley was slated to speak on Monday night and was expected to announce this week his plan to bring forward his retirement.

"Mr Dudley's term ends in January 2019 but will step down in spring or summer next year when his successor is found and approved.

"If so, Mr Dudley will be the third ally of Fed chair Janet Yellen to step down on the Fed Board of Governors.

"With Mr Trump nominating Fed governor Jerome Powell to the Fed chair next year, Ms Yellen may also resign as governor after her term expires in February next year.

"The above Fed governor resignations have been viewed as one common voice against Mr Trump's push to deregulate Wall Street," Mr Wee noted.

This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts

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