S'pore bourse dips on weak retail sales data

Yesterday's trading yielded gains for most Asian markets, but the Singapore bourse fared a little worse, ending the day with the Straits Times Index (STI) down 0.16 per cent or 5.12 points to 3,201.15.

The key index held on to early gains before the midday break, then took a bumpy ride downwards in the afternoon session after the latest release of local retail sales data showed a 6 per cent year-on-year decline in December and a 0.7 per cent slump for last year.

Sales were dragged down by motor vehicles and would have registered a 1.1 per cent annual increase with the segment omitted.

Meanwhile, markets in China, South Korea and Japan edged higher on hopes that the US and China could work out their differences as they resume trade talks in Beijing.

However, gains were capped by tensions from the presence of two US Navy warships in a China-claimed part of the South China Sea, as well as uncertainty over how successful the trade talks will be.

CMC Markets analyst Margaret Yang wrote in a morning note: "Due to the complexity and difficulty of trade issue over technology, intellectual property and security disputes, markets are probably not putting too much hope on the trade talks to yield a major breakthrough.

"What really concerns us is whether the tariff deadline can be removed or extended beyond March 1, because that will bring material impact to growth and earnings."

On the local bourse, losers outnumbered gainers 210 to 184, as about 1.15 billion securities worth $969.22 million changed hands.

Market activity should pick up in the next two to three weeks, heading into the thick of the earnings season, said Mr Marcus Toh, principal trading representative at Phillip Capital.

In particular, the three banks, along with Venture Corp and CapitaLand, will likely see movement when they report full-year results next week.

Ms Yang said the STI will depend on positive earnings surprises from these and other heavyweight counters such as Singtel and Singapore Airlines to break through the current key resistance level of 3,200.

Among actively traded counters, Ezion Holdings closed up 0.2 cent or 4.44 per cent to $0.047, with 83.4 million shares traded.

Mapletree Industrial Trust retreated 4 cents or 1.97 per cent to $1.99 on volume of 12.7 million units.

The trust announced yesterday morning that it had closed an upsized private placement exercise, issuing 103.36 million new units at $1.945 per unit, or a 4.2 per cent discount to its Monday close.

The placement was 2.2 times covered and raised about $201 million, mainly to finance the acquisition of 18 Tai Seng Street.

RHB Research yesterday initiated coverage on ESR Reit with a "buy" call and target price of $0.61.

Analyst Vijay Natarajan said that benefits from the real estate investment trust's recent merger with Viva Industrial Trust are starting to flow through, including a more diversified asset profile, significantly improved trading volumes and lower debt costs and cost synergies.

He added that key risks are a high gearing level, which would limit debt headroom for acquisitions, potential tenant defaults (from Hyflux in particular) and short land lease tenure. ESR Reit closed flat at $0.515 with 1.5 million units traded.

Food and beverage firm TSH Corp closed down 7 cents or 18.42 per cent to $0.31 on its first day of trading after a reverse takeover by the owners of Sloshed!, a pub and liquor group.

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