STI slips after Keppel fine roils O&M

With the market moving into one of the quietest trading weeks of the year, there were nevertheless a few stocks of note in yesterday's trading on the Singapore Exchange (SGX).

Led by conglomerate Keppel Corporation, Singapore's Straits Times Index resumed its recent downtrend, closing down 7.55 points or 0.22 per cent to 3,378.16.

About 558.3 million shares worth $522.4 million in total changed hands. Well over a third of value traded was taken up by Keppel, telco Singtel and DBS Bank.

Keppel dived to as low as $7.09 before rising in the course of the day to finish at $7.29, down 2.4 per cent or 18 cents.

The company's stock price fall had been expected after subsidiary Keppel Offshore and Marine said on Saturday that it will pay US$422 million in fines as part of a global resolution for a corruption probe across three jurisdictions in Singapore, Brazil and the US.

The fine amounted to about 31 Singapore cents per share. Keppel said it has the financial resources to pay the fine and will make a provision accordingly in the current year.

Rival Sembcorp Marine, which is also exposed to Brazil, fell seven cents or 3.6 per cent to $1.87.

The group said yesterday that it has sold its West Rigel rig for a slight loss - a deal which The Business Times had already reported earlier this month.

Looking ahead, share prices of both firms will inevitably be linked to the medium-term expectations for the price of oil.

In the short-term, markets are still bullish as inventories continue to be drawn down and rig counts are somewhat flat.

CIMB Research also said in a Christmas note that it is keeping an "overweight" call on the offshore and marine sector, with the return of non-drilling orders as a key catalyst.

Elsewhere in the world, some analysts are notably trimming their sales forecasts of Apple's new iPhone X model.

On SGX, Hi-P International, a contract manufacturer which got half its 2016 business from Apple, nevertheless rose four cents to finish at $1.88. The company is one of SGX's top performers of the year, up about four times from the beginning of 2017.

Maybank Kim Eng Research had initiated coverage of the firm on Dec 20 with a "buy" call and a target price of $2.11, citing a focus by the company on blue-chip companies such as Apple, Keurig and Colgate.

This will help the company to be more profitable, said the broker. It forecast revenues to rise 15 per cent a year in the next two years to 2019, and net profit to go up by 19 per cent a year.

In the small-cap space, textbooks and consumer products reseller Y Ventures Group hit an intraday high of $0.295 before closing unchanged at $0.275.

Price action occurred on relatively high volumes last Friday and yesterday. It helped push the firm up near its historic intraday high of $0.30. The high was achieved soon after the initial public offering (IPO) when the price jumped in mid-July from the IPO price of $0.22.

Soon after, the price sank by as much as half, hitting a low of $0.152 in mid-August.

For the group's half-year to June 30, 2017, loss attributable to shareholders was US$162,053 (S$218,000) compared to a profit of US$374,519 a year ago.

The results of the group, which bills itself as a data-driven e-commerce play, had been weighed down by IPO-related expenses.

Revenue, however, had jumped 47 per cent to US$7.3 million, and the group said it expects to remain profitable this year.

For full listings of SGX prices, go to http://btd.sg/BTmkts