Bulls And Bears

Investors wary amid regional volatility

STI slightly down with most markets subdued in wake of Shanghai's shock plunge

Singapore shares remained on edge yesterday as the market continued to be weighed down by volatility across the region, particularly in China.

The benchmark Straits Times Index closed a choppy session down 1.74 points, or 0.06 per cent, at 2,834.23.

Most other markets in the region were similarly subdued following China's dreadful start to the year, with Shanghai plunging 6.9 per cent on Monday on renewed fears over the country's slowing growth. It was down a further 0.3 per cent yesterday while Shenzhen fell 1.9 per cent.

This came despite Chinese regulators trying to shore up investor confidence. The central bank injected 130 billion yuan (S$28 billion) into domestic markets while the securities regulator suggested it might restrict share sales by major investors.

Elsewhere, Hong Kong retreated 0.7 per cent and Tokyo pared 0.4 per cent.

Wall Street slid 1.6 per cent overnight as traders returned to the financial markets rattled by the global sell-off. Analysts said key economic reports to be released this week will likely take centre stage, including data on factory activity, the monthly US jobs report and minutes from the Federal Reserve's meeting that culminated in the first interest rate increase since 2006.

Singtel contributed to the STI's weak performance yesterday. The telco shed one cent or 0.3 per cent to $3.58, losing ground for the fifth straight session.

Global Logistic Properties sank six cents or 2.9 per cent to $2.03, while Genting Singapore dipped one cent or 1.3 per cent to 75 cents.

Two of the local banks continued on a downward trajectory, with DBS Group Holdings shedding four cents or 0.2 per cent to $16.24 and United Overseas Bank losing nine cents or 0.5 per cent to $19. OCBC, however, inched up one cent or 0.1 per cent to $8.65.

Palm oil producer Golden Agri-Resources was among the few making notable gains, jumping two cents or 6.2 per cent to 34.5 cents.

Tigerair jumped four cents or 9.8 per cent to 45 cents after Singapore Airlines (SIA) lifted its buyout offer for the budget carrier from 41 cents a share to 45 cents and further extended the deadline for acceptances. But some minority shareholders remain concerned that the offer still undervalues what long-term shareholders have paid, noted Singapore Investors Association Singapore president David Gerald.

"Whether SIA can achieve its 90 per cent threshold would very much depend on those who have been hoping for an upward revision to accept the current revised offer," he said.

"They are well advised to revisit the (independent financial report) before making up their minds."

Trade across the exchange amounted to 1.24 billion shares worth $894.9 million.

A version of this article appeared in the print edition of The Straits Times on January 06, 2016, with the headline 'Investors wary amid regional volatility'. Print Edition | Subscribe