Singapore market awash in red

The Singapore bourse was a sea of red yesterday as sellers took centre stage.

The key Straits Times Index (STI) ended lower, with the three local banks tumbling following the unveiling of an uninspiring set of results from DBS Group Holdings before the market opened.

There was an unexpected interlude at the start though, owing to a technical glitch at index provider FTSE Russell, which temporarily disrupted real-time values of Singapore and Malaysia's market benchmarks.

This became apparent after the STI remained unchanged in the first hour of trading despite the fall in bank stocks, reported Bloomberg.

The problem was rectified around 10am. The STI fell 1.28 per cent lower at 3,286.32 at the close of trading, on total market turnover of 1.84 billion shares worth $1.23 billion.

Decliners outnumbered advancers 265 to 124, or about two down for every one up.

The most actively traded counter was offshore and marine company Ezion Holdings, which saw some 77.82 million shares changing hands.

It ended at 7.4 cents, down by 6.33 per cent or 0.5 cent.

It recently announced several changes to its senior management to "sharpen focus on business priorities and operational efficiency of the group".

Among the changes were the appointment of Mr Goon Fook Wye Paul as chief group business officer. He relinquished his position as chief financial officer (CFO), with Mr Chong Chee Wei Alan stepping in as acting CFO.

DBS, the first of the three banks to announce earnings, reported an 18 per cent year-on-year gain in net profit. The results missed analyst estimates as stronger net interest income was offset in part by a fall in non-interest income on lower trading income.

It clocked net profit of $1.33 billion - translating to an annualised earnings per share of $2.10, up from $1.76. This was lower than the average forecast of $1.44 billion in a Bloomberg survey of six analysts.

LOWER

Investors sent the stock lower by 1.63 per cent, or 44 cents, to finish at a one-week low of $26.50, on turnover of some 9.13 million shares.

The missed estimates caused jitters to the other two banks.

United Overseas Bank, which announces its Q2 results today, dipped by 2.05 per cent, or 56 cents, to $26.70, while OCBC Bank, which will report its second-quarter results on Monday, retreated 2.24 per cent, or 26 cents, to $11.34.

Despite the drop, RHB Research maintained its "buy" call on DBS in a note, with a $30.30 target price on an assumption of long-term return on equity of 13.6 per cent.

In the transport sector, ComfortDelGro shed 2.53 per cent, or six cents, to a one-week low of $2.31.

The fall came on news that ride-hailing service Grab had snagged US$1 billion (S$1.4 billion) in funding from investors including OppenheimerFunds, Ping An Capital and Lightspeed Venture Partners. This was after securing US$1 billion from Japan's Toyota Motor Corp.

Still on transport, Singapore Airlines saw its shares tick down 1.13 per cent to end at $9.67, as low-cost arm Scoot announced it would be raising fares by $5 to $30 for each sector on the back of rising fuel prices.

Meanwhile, the tech sector's woes continued as contract electronics manufacturer Hi-P International sank 9.45 per cent to a one-year low of $1.15.

Hi-P was not spared the recent trade war between the US and China, DBS Group Research analyst Ling Lee Keng wrote in a note, adding that the situation has created uncertainty and margin pressure within the supply chain.

The broker kept a "hold" call on the stock but revised its target price to $1.21, down from $1.80 previously.

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