Investors take profits as subdued Singapore market closes 2.8 points down

SINGAPORE - The local market remained subdued on Thursday following two days of decline, as investors took profit on blue chips while keeping most of their attention on penny plays.

The benchmark Straits Times Index (STI) closed 2.8 points or 0.08 per cent down to 3,356.37, marginally lower than Wednesday's close at 3,359.17. But the index had hovered around 3,370 before the late hour sell-down wiped off the gains.

The lacklustre momentum at home reflected the tepid reactions at Wall Street, where Dow Jones Industrial Average dropped for the second day and lost 0.38 per cent as disappointing results from tech giants such as Apple sent the market down.

With Singapore also entering the corporate results season, local stocks will move in tandem with the financial figures, remisier Desmond Leong said.

"In terms of earnings outlook, oil and gas plays will likely remain weak and I expect key counters such as Keppel Corp to continue their recent poor form."

Keppel gained two cents or 0.25 per cent to close at S$8.16 yesterday, but has lost 2.9 per cent in the past month. Ezra Holdings closed 0.2 cent or 1.33 per cent down at 14.8 Singapore cents while Ezion Holdings dropped 0.5 cent or 0.55 per cent to 90.5 Singapore cents.

But Singapore banks will remain the haven for stability, Mr Leong added, noting their consistently stable earnings and the upcoming rate hike as positive factors.

All three banks have been gaining over the past week, with DBS rising six cents or 0.28 per cent to S$21.38 yesterday. OCBC was up seven cents or 0.68 per cent to close at S$10.42, and United Overseas Bank ended four cents or 0.17 per cent higher at S$23.42.

Also on the STI, Hutchison Port Holdings Trust was the top gainer, up 1.5 US cent or 2.48 per cent to close at 62 US cents. The trust reported on Tuesday an 8.5 per cent increase in its second quarter profit.

Noble Group, on the other end of the index, lost the most, paring two cents or 3.08 per cent to 63 cents. With 127.5 million shares traded, the commodity firm likely had another round of share buy-back yesterday.

Meanwhile, the pennies were still rife with activities after over a week of run-up. CEFC International remained on punters' radar, gaining another 12 per cent. The counter has by now increased around tenfold, and investors will do well to avoid it, Mr Leong warned.

"Pennies are all about risk-taking, but caution is still necessary. My advice to investors interested in playing pennies is to look at stocks that are just starting to rise, say for the first one or two days. Beyond that, you have to be careful."

whwong@sph.com.sg