Business

STI hit by oil price plunge but recovers on property news

The Straits Times Index over the course of this week rose to a new 12-month high when it closed at 3,145.29 on Wednesday.

However, it came under pressure on Thursday when oil prices plunged 5 per cent, then recovered yesterday after news that some property curbs are to be loosened slightly.

With the STI gaining 14.51 points yesterday to 3,133.35, the gain for the week came to 11 points or 0.4 per cent.

Turnover, which consistently rose well above $1 billion per day for the last two months, tapered off this week to an average of $1.05 billion between Monday and Thursday. Yesterday, with the boost from a spurt of interest in property stocks, volume amounted to 2.6 billion units worth $1.4 billion. Excluding warrants, the advance-decline score was 269-195.

Meanwhile, the authorities announced yesterday that among other measures, property seller's stamp duties would be revised to holding periods of three years from four years previously and be lowered by four percentage points for each tier, making the range 4-12 per cent.

In response, real estate counters surged, led by City Developments which gained $0.54 or 5.6 per cent to $10.15 with 6.1 million done.

Banks have been the main index movers for many months now on the expectation that the worst may be over insofar as their loans to the oil and gas (O&G) sector is concerned and the belief that rising interest rates would be good for bank margins. Also in play have been O&G stocks - a mid-week plunge in oil sent the sector diving before stability returned yesterday.

ROTATIONAL

Trading at the other end of the size spectrum was marked by heavy rotational play, with new names popping into life every day only for the interest to fade the next day.

Still, perennial market favourite Noble Group regularly featured, closing yesterday unchanged at $0.21 with 13.9 million traded.

Also in focus was ISR Capital, whose trading suspension by the Singapore Exchange (SGX) since Nov 27, 2016, was lifted on Monday together with a "Trade with Caution" warning.

The exchange said that the warning was because businessman John Soh, one of the individuals alleged to have been behind the penny stock crash of 2013, is now being investigated for allegedly manipulating ISR's shares and being involved in the management of the company's affairs.

ISR's shares crashed 69 per cent upon resumption of trading, and came under further pressure on Thursday after a disclosure that the company's largest shareholder David Rigoll had resigned as executive director and had breached a moratorium by selling part of his stake in the open market.

Yesterday, the shares closed $0.003 up at $0.025 with 48 million traded.

Among the other features of interest this week was news that SGX is seeking feedback on whether to have a break in trading between 12-1pm, and whether to widen the minimum bid size for stocks between $1-$2.

Next week's main feature is the US Federal Reserve's Open Markets Committee meeting, at which a 25 basis point interest rate hike is almost certain.

sivan@sph.com.sg

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