Bulls And Bears

Poor showing by blue chips weighs on STI

Lacklustre earnings keep punters on sidelines while spectre of Trump casts long shadow

Poor corporate earnings from blue-chip firms and jitters over a possible win by Republican nominee Donald Trump kept Singapore shares in negative territory yesterday.

The Straits Times Index (STI) fell 13.28 points to 2,788.80 yesterday, leaving it down nearly 1 per cent for the week.

Singtel proved to be a major drag on the STI, sinking 1.3 per cent or five cents to $3.85 because of concerns over its second-quarter earnings, to be released on Nov 10.

Rivals StarHub and M1's lacklustre third-quarter showings have triggered concerns over the telco sector. StarHub's third-quarter net profit of $86 million was lower than forecast, while M1's results also missed expectations, with revenue falling 10.3 per cent to $249.1 million.

Jardine Matheson Holdings also weighed down the market yesterday, shedding 1.3 per cent or 80 US cents to US$58.95, while ComfortDelGro slipped 3.9 per cent or 10 cents to $2.45.

UOB fell 0.6 per cent or 11 cents to $18.44 after reporting a 7.8 per cent fall in third-quarter net profit to $791 million, highlighting the hit the bank is taking from the energy sector.

Said remisier Alvin Yong: "People are treating bank stocks like oil stocks these days. As long as oil prices don't improve, and the oil and gas sector doesn't get new orders, the oil albatross will remain around the banks' necks."

But, he added that there is still one bright spot - a chance of earning more in net interest margins from a possible United States rate hike next month.

Singapore Airlines slipped 1.6 per cent or 16 cents to $9.95 after posting a 70 per cent plunge in second-quarter profit to $64.9 million from a year ago.

Genting Singapore bucked the downturn, jumping 11.8 per cent or nine cents to 85 cents, with 129.1 million shares traded. The casino operator's third-quarter earnings rose 187.2 per cent to $106.9 million because of its conservative credit-extension policy on high rollers.

Global Logistic Properties remained one of the most actively traded counters on speculation of takeover interest from several parties, including China's sovereign fund. The logistics facilities provider gained 0.5 per cent or one cent to $2.06, with 47.9 million shares traded.

Meanwhile, ARA Asset Management chief executive John Lim is reported to be leading a group of investors to buy out the firm, a real estate fund manager that he founded. Mr Lim owns 19 per cent of ARA.

Super Group dipped 0.8 per cent or one cent to $1.25, after getting a $1.45 billion buyout offer from a Dutch beverage giant.

Other heavily traded counters include Noble Group, which fell 3.4 per cent or 0.6 cent to 16.9 cents, with 147.2 million shares traded. Electronics and furniture retailer TT International jumped nearly 14 per cent or 0.6 cent to 4.9 cents, with 48 million shares traded.

A version of this article appeared in the print edition of The Straits Times on November 05, 2016, with the headline 'Poor showing by blue chips weighs on STI'. Print Edition | Subscribe