STI briefly hits 2-year high

This article is more than 12 months old

Broader market not doing well this week; losers outnumber gainers for third day in a row

Water, water, everywhere, nor any drop to drink. We are quoting from an English poem here, while ruminating on the fall of water treatment star Hyflux, which is trading near a 15-year low this week.

Liquidity continues to slosh around global financial markets, while Bitcoin crosses US$10,000 (S$13,500) despite its exchanges being one hack away from disaster.

You cannot eat a Bitcoin, there are numerous competing alternatives, and if nuclear winter does arrive after North Korea and the US lob missiles at each other, there will be precious little electricity left for you to turn on your e-wallet.

Doomsday scenario aside, liquidity continues to flow to Singapore. The benchmark Straits Times Index (STI) briefly hit a 2½-year high of 3,449.32 points at the opening bell, but retreated during the course of the day to finish at 3,438.99 points, down 3.36 points.

That may sound fine, but the broader market is not feeling too good this week. Losers have outnumbered gainers for the third day in a row.

One losing stock is a well-known name. What has happened to Hyflux? The company used to be an exemplar of a Singaporean company that has successfully ventured abroad.

The lustre has since faded, and sell-side analysts, sensing muted prospects, have abandoned their coverage.

Yesterday, Hyflux fell half a cent to 37.5 cents with more than 16 million shares changing hands. The last time it traded this low was almost 15 years ago.

One reason is that its Tuaspring power plant hasn't been doing well due to weak electricity prices in Singapore. When earnings and cash flows are weak, pressures from servicing its debt pile up.

The company is now trading at half its book value. Yet, so many shares changing hands in a technically oversold situation is intriguing, to say the least.

By contrast, property play Tuan Sing Holdings is hitting a three-year high in prices as well as volumes.

Over 33 million shares were traded, and the company rose four cents to close at 45.5 cents, up nearly 10 per cent.

The company, controlled by the family of Indonesian tycoon Sjamsul Nursalim - also known as Liem Tek Siong - and run by his son William, has almost a billion dollars worth of equity in commercial buildings, hotels and condo developments.

A major property under development is 18 Robinson, which will be ready at the end of next year and from which a material developer's profit might be realised.

Tuan Sing is trading at a 40 per cent discount to book, about half a standard deviation above long-term averages. Given the property boom this year, some fair-value gains are probably getting priced in.

November is almost up. Looking back, a few things stand out.

First, much of the 60-odd points gained by the STI was due to the three local banks, led by DBS Bank, as well as casino play Genting Singapore.

Companies that dragged down the index were palm oil processor Wilmar International and property plays City Developments and CapitaLand.

The banks are approaching technically overbought territory, though if interest rates keep rising and the global economy keeps recovering, they can continue to do very well.

Across the broader market, one of the biggest winners this month was Cosco Shipping International (Singapore), up about 70 per cent.

After disposing of its shipyard business, the China-controlled company has made an offer for logistics company Cogent Holdings.

Meanwhile, one of the biggest losers - no surprise - was commodities trader Noble Group, which is down about 50 per cent this month.

Noble is thirsty for cash, but there is a debt albatross that is not going away.

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