Stocks end mixed in low volume session
Yangzijiang is most active STI stock with 22.2m traded; Olam draws a query from SGX after rising 9¢ to $2.23
A largely nondescript Tuesday ended with stocks mixed.
An early bout of selling of the banks brought on by an overnight dip on Wall Street depressed the Straits Times Index to an intraday low of 3,278, though a positive session for the Dow futures was possibly the motivation for afternoon short-covering that lifted the index to 3,288.95 at the close.
This trimmed its loss to just 2.61 points for the day.
News reports said that Monday's session in the US saw only 4.6 billion shares traded, the lowest one-day total this year because the US bond market was closed for Columbus Day.
The local market probably wasn't that far off in terms of volume done - 1.5 billion units worth $960.1 million was best described as uninspiring.
Excluding warrants, there were 246 rises versus 184 falls, so trading was overall more mixed than weak.
Needless to say, brokers had few positive or flattering descriptions to offer for the current state of the market.
As usual, it was the banks and Jardine stocks that drove the index. In DBS's case, it first dropped to a morning low of $21.23 before rebounding to finish the day at $21.50 for a net gain of $0.03 on volume of 2.6 million. UOB and OCBC however, didn't enjoy the same fate, both closing lower.
Yangzijiang Shipbuilding was the STI's most active component when it fell $0.03 to $1.46 on volume of 22.2 million, while other active index constituents were Singtel and Genting Singapore.
In the second line, shares of commodities firm Olam International jumped $0.09 to $2.23 with 2.6 million traded, drawing a query from the Singapore Exchange.
Olam replied by highlighting an Oct 6 announcement that Temasek Holdings subsidiaries now own 281.9 million additional shares from the exercise of warrants, adding that it otherwise did not know of reasons for the interest in its shares.
In the property sector, shares of City Developments Ltd (CDL) rose $0.10 to $11.85 on volume of four million. The company has announced the potential offer for the remaining shares of Millenium & Copthorne (M&C) which it doesn't own.
Phillip Securities in its report, "Putting the cash hoard to good use", said that after consolidation of M&C accounts, CDL's revalued net asset value (RNAV) gets adjusted upwards to $15.90 from $14.24.
"Our target price will improve to $13.51 from $12.10 assuming the same 15 per cent discount to RNAV post full-consolidation," said Phillip.
OCBC Investment Research highlighted that there was no certainty that a formal offer will be made, and discussions on the other terms and conditions of the proposed offer are still ongoing.
"We see this as a positive development for CDL given the attractive price of the proposed offer and believe a full consolidation of M&C on these terms will be accretive for the group," said the broker as it called a "buy" on CDL with an unchanged $12.90 target price.
Goldman Sachs Asset Management in its Global Fixed Income report noted that cyclical assets remain supported by the current macro configuration of strong global growth, contained volatility, gradually rising or low inflation and potential fiscal expansion in the US.
"That said, we are alert to a change in Fed leadership which could result in a more hawkish policy stance, and so we have modestly reduced overweight positions in EM currencies versus the US dollar," it added.
This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts