Mixed showing in Asian markets
STI falls 13.47 points to close at 3,120.92; analysts expect Asian markets to remain cautious and bearish
Asian markets closed mixed yesterday amid uncertainty over the US' continued tariff feuds with Canada and China.
Hong Kong and Singapore markets fell at their close while South Korea and Tokyo snapped three-day and six-day losing streaks respectively.
The Straits Times Index fell 13.47 points or 0.43 per cent to end at 3,120.92. About 1.8 billion shares worth $905.8 million changed hands, compared with 1.2 billion shares worth $824.7 million on Friday. Losers outnumbered gainers 281 to 135.
The most actively traded stock was Rex International Holding, which gained 0.1 cent or 1.19 per cent to end at 8.5 cents with 122.2 million shares traded.
Among STI stocks, Singtel lost three cents or 1 per cent to end at $3.10. OCBC Bank retreated six cents or 0.5 per cent to close at $11, and United Overseas Bank ended at $26 having lost 15 cents.
DBS Bank bucked the trend, rising one cent to $24.33. Other gainers included Singapore Press Holdings (SPH), which rose following news yesterday that it had acquired a portfolio of student accommodation buildings in Britain for about £180.5 million (S$324 million).
Shares of SPH advanced six cents or 2.2 per cent to end at $2.79.
Sats and Singapore Airlines advanced following a UOB KayHian report that recommended maintaining market weight in the aviation sector.
The rise of one cent for both stocks translated to a 0.2 per cent gain and a closing price of $5.02 for Sats, which is UOB KayHian's top pick in the sector. SIA gained 0.1 per cent to end at $9.63 after 885.6 million shares changed hands.
Analyst K. Ajith noted that Sats' gateway services revenue and profitability are likely to grow in the quarters ahead, on the back of improving ship calls at Marina Bay Cruise Centre.
Inbound tourist arrivals by sea in the second quarter of this year rose 24 per cent year-on-year, and Q3's seasonally stronger growth could exceed Q2's.
"Notwithstanding the temporary closure of the Kansai airport, Sats' Japanese catering arm TFK should also benefit from higher capacity addition by key customer Japan Airlines (JAL)," Mr Ajith wrote.
"JAL has added several international flights since May, all on wide-bodied aircraft. This should lead to higher meal volume and profitability at 51 per cent owned TFK."
As for SIA, Q2 earnings may be impacted by the Osaka floods and Hokkaido earthquake disrupting travel to Japan, said Mr Ajith. Although the stock is trading near a three-year low, lower fuel prices would be the primary stock price catalyst for SIA.
Analysts expect Asian markets to remain cautious and bearish this week as trade tensions persist.
China's latest attempt to prevent a full-blown trade war with the US came in the form of an invitation to the heads of Wall Street's leading financial institutions to an event on Sept 16 to discuss relations, the Financial Times reported yesterday.
The event will include a meeting with Chinese Vice-President Wang Qishan. Some of those invited include former US treasury secretary Hank Paulson; Blackstone Group chairman Stephen Schwarzman; and the heads of Citigroup, Goldman Sachs, JPMorgan Chase & Company and Morgan Stanley.
Chinese officials expressed hope the group will be able to meet every six months and advise Beijing on financial and economic reforms, the newspaper said, but given the short notice, it is unclear who will attend.
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