Bank shares weigh down market as STI slides for second straight day

The benchmark Straits Times Index (STI) shed 15.98 points, or 0.48 per cent, to 3,278.95, while overallon bourse came up to just 942 million shares worth S$1.1 billion.
The benchmark Straits Times Index (STI) shed 15.98 points, or 0.48 per cent, to 3,278.95, while overallon bourse came up to just 942 million shares worth S$1.1 billion.PHOTO: REUTERS

SINGAPORE - Losses in the local banks again weighed down on the Singapore market, which lost ground for the second straight day.

The benchmark Straits Times Index (STI) shed 15.98 points, or 0.48 per cent, to 3,278.95, while overallon bourse came up to just 942 million shares worth S$1.1 billion.

DBS Group Holdings was the heaviest hit among the three as it sank 1.9 per cent or 39 cents to S$20.39. United Overseas Bank lost 1 per cent or 24 cents to S$23.72 while OCBC Bank slid 0.7 per cent or eight cents to S$11.13.

"The interest rates have not really been rising as much as people are expecting, so that will definitely impact the interest margin going forward," Mr Joel Ng, an analyst with KGI Securities in Singapore, told Reuters.

"Another reason has also been that many of the oil and gas companies are now having huge writedowns on their assets. I think that is also affecting the banks somewhat."

Fears over the banks' exposures to the still-battered offshore and marine sector have returned in recent weeks - particularly after Ezion Holdings called for a trading suspension on Monday, pending discussions with its stakeholders, which includes bank lenders and other creditors.Ezion last traded at 19.7 cents on Aug 8.

Elsewhere, Sino Grandness Food Industry Group received a trading query by the Singapore Exchange in the afternoon. The counter tumbled to 16.5 cents before finishing at 18.4 cents, 12.4 per cent or 2.6 cents down from the previous day's close.

Best World International, a direct selling firm and beauty product distributor, continue to slide with a 1.1 per cent or 1.5-cent drop to S$1.34. This follows a 12 per cent on Tuesday on news that China is cracking down on pyramid schemes.

In Asia, markets were mostly mixed as traders awaited the minutes of the United States Federal Reserve's latest meeting for clues on its policy outlook. Hong Kong advanced 0.86 per cent, while Shanghai edged down 0.15 per cent and Tokyo pared 0.14 per cent.