Asian shares slip despite Shanghai's rally, STI closes 23 points down

An investor walks past an electronic screen showing stock information at a brokerage house in Nanjing.
An investor walks past an electronic screen showing stock information at a brokerage house in Nanjing.PHOTO: REUTERS

SINGAPORE - Local shares slid for the second straight day on Tuesday (Feb 2) and most Asian markets also ended in red ink.

The benchmark Straits Times Index closed 23.18 points or 0.89 per cent down to 2,579.23 in a quiet day that saw only 649.7 million shares worth S$927.2 million transacted.

Elsewhere, Tokyo pared 0.64 per cent, Hong Kong dropped 0.76 per cent, Kuala Lumpur was down 0.88 per cent and Sydney shed 0.99 per cent. Only Shanghai ended positively with a 2.26 per cent gain, on the back of some 100 billion yuan in liquidity injected into the market by the People's Bank of China.

Back in Singapore, only eight of the 30 STI component stocks went up, led by Global Logistic Properties. The logistics facility developer put on four cents or 2.46 per cent to $1.665, recovering from Monday's 3.85 per cent drop.

Hutchison Port Holdings Trust, which announced a HK$860.6 million profit for the quarter to Dec 31, ended flat at 47 US cents ahead of the results announcement. With the recovery in the fourth quarter, HPHT's full year earnings per unit went up 110.1 per cent year-on-year to 20.03 HK cents.

The rest of STI stocks had less spring in their heels, with 18 blue chips down on the day. Yangzijiang Shipbuilding dropped 7.5 cents or 7.58 per cent to 91.5 cents, likely hit by profit taking after Monday's gain.

The three local banks remained on a downtrend. United Overseas Bank lost 38 cents or 2.14 per cent to S$17.39, DBS dropped 27 cents or 1.96 per cent to S$13.51, while OCBC pared 10 cents or 1.29 per cent to S$7.63.

Despite lingering concerns on bad debt and slowing loans growth, Singapore banks remain very robust institutions with strong earnings. Following the extensive selloff, the banking plays are now quite affordable for the major corporates and heavyweight blue chips that they are.

The trio's price-to-book ratios are all below one, with DBS at 0.86, OCBC at 0.95 and UOB at 0.99. The ratio compares share price with a company's own booked value, and a figure below one commonly implies that a stock is undervalued.

There is also value to be had in SIA Engineering, which dropped one cent or 0.29 per cent to S$3.4 despite Monday's announcement of a 6.7 per cent net profit increase in the three months to Dec 31.

The shares have dropped around 15 per cent from its last peak in November, DBS Group Research analyst Suvro Sarkar said in a note.

whwong@sph.com.sg