Business

STI extends losses as bank stocks fall

Singapore index sheds another 28.6 points; most markets in region end on weaker note

Singapore equities drifted uninspiringly lower for a second straight day this week, dragged by weaker banking stocks, index movers and oil and gas related counters.

The benchmark Straits Times Index (STI), which tracks Wall Street closely, wrapped up yesterday's session at 3,201.77 after losing 28.65 points or 0.89 per cent.

Turnover came in at 2.2 billion units valued at $1.1 billion, comparable to 2017's average dollar value of about $1 billion. Excluding warrants, losers outnumbered gainers 275 to 153.

Across the region, most markets ended on a weaker note.

Hong Kong's Hang Seng Index fell on fears that MSCI's decision to include more mainland China stocks in a key benchmark index could threaten the financial centre's role as a key global investor gateway to China.

Tokyo's Nikkei index snapped a three-day winning streak as energy firms suffered a slump in oil prices.

Malaysia's Kuala Lumpur Composite Index was also on a downward trend, while Australian shares were dragged by selling in banks and pressure from falling iron ore prices.

Yesterday's losses on the STI were largely attributable to stocks of the three local lenders, Jardine Matheson Holdings, Singtel and Keppel Corporation, among other laggers.

At the close of the session, stocks of DBS, OCBC and UOB lost a combined 10.6 points, with OCBC leading the pack.

OCBC shares were 17 cents lower at $10.47, with about 4.9 million units changing hands. UOB shares were down 21 cents at $22.84, while DBS's stock was five cents lower at $20.40.

On Monday, OCBC had issued a writ of summons and statement of claims in the High Court of Labuan in Malaysia to a unit of offshore marine group Nam Cheong, whose stock also ended lower yesterday.

The firm owes OCBC over US$10 million (S$13.9m).

Worries of a sharp fall in oil prices that led to a weak session on Tuesday for Wall Street spilled over to yesterday, with Magnus Energy, Nam Cheong, Yangzijiang Shipbuilding and Ezion counters - all among the most active - swinging into negative territory.

TREND

In particular, Nam Cheong's shares slid 0.6 cent to 2.1 cents on volume of 17.7 million units traded. Bucking the trend was Cosco Shipping International, whose stock gained 5.5 cents to end at 30.5 cents.

IG market strategist Jingyi Pan had yesterday touched on the inclusion of Chinese stocks on the US-based index compiler MSCI.

She said: "Chinese authorities have been garnering for this positive decision and this recognition of the country's efforts in opening up the financial market could really encourage more to be done that could lead to greater capital inflows.

"For regional markets, including the local Singapore market, the impact may be second-order and likely only be felt in the longer term.

"In the near term, the inclusion could really be seen as symbolic at best with the implementation due only in 12 months."

On news of the inclusion, Citi Research said the move would have a mild effect and "should support expectations for bond index inclusions too".

Back home, Singtel, among those on the actives list, finished the session four cents lower at $3.75, with 25.6 million shares changing hands, while transport operator ComfortDelGro's stock ended four cents lower at $2.41, with 26.8 million shares traded.

Meanwhile, shares of Ascendas Reit slipped six cents to end at $2.66. OCBC Investment Research had downgraded the Reit to "hold" yesterday on valuation grounds, with an unchanged target price of $2.66.

Among the leaders on the STI were stocks of Singapore Press Holdings, SATS and Global Logistic Properties, which has asked shortlisted bidders to submit firm proposals by month-end.

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