Singapore shares pull back as investors await key data from US, China

SINGAPORE - The local market retreated for the second day as investors braced for key economic indicators coming out of the United States and China.

With Federal Reserve's latest meeting minutes and China's manufacturing purchasing managers' index set to be released back to back this week, investors here are staying on the side line to avoid market jitters.

As a result, the benchmark Straits Times Index (STI) ended 5.53 points or 0.16 per cent lower at 3,454.04. Only $921.5 million worth of shares changed hands in yet another slow trading day.

Aside from economic worries, Singapore is also held back by low trading volume, at a time when the bull-run in Greater China continues to draw capital away from China, IG market strategist Bernard Aw noted.

Shanghai closed 3.13 per cent up - the biggest one-day gain in four months - as investors welcome Beijing's latest guidelines for economic reform.

"Meanwhile, corporate earnings in Singapore are not encouraging, with less than half of companies announced so far beating analysts' forecast. I really don't see a lot of upside in the local market now as its consolidation continues," Mr Aw cautioned.

Against this sluggish backdrop, the most actively traded play was Sino Construction, which closed 0.2 cent or 5.88 per cent up at 3.6 cents. Energy and marine pennies also remained the market's focus yesterday, with EMS Energy ending 0.1 cent or 4.17 per cent higher at 2.5 cents, while Jaya Holdings closed 0.1 cent or 2.22 per cent higher.

Among the blue chips, Capitaland stood out as the top gainer, closing seven cents or 1.98 per cent up at $3.60. The property group has been gaining since last Friday when it issued $650 million worth of convertible bonds to reduce debt.

CapitaLand Mall Trust also closed two cents or 0.91 per cent up at $2.21, while Singapore Technologies Engineering ended four cents or 1.12 per cent higher at $3.60.

ST Engineering last week reported a 5.3 per cent drop in net profit for the first quarter. But OCBC Research's Carey Wong said in a recent note that the results were still in line with expectations and dividend yield will come in at 4.1 per cent.

But Genting Singapore fared worse after announcing a 73 per cent plunge in first quarter net profit. The gaming company dropped the most on STI today, closing two cents or 2.07 per cent down at 94.5 cents.