Singapore shares retreat as sentiment cools on oil price woes

The local benchmark Straits Times Index dropped 52.11 points or 1.95 per cent to 2,619.96, snapping its recent good run.
The local benchmark Straits Times Index dropped 52.11 points or 1.95 per cent to 2,619.96, snapping its recent good run.PHOTO: ST FILE

SINGAPORE - Asian markets had a choppy day on Feb 24, with the unfolding of several events that sent investors scampering for exits.

Plunging oil prices again came to the fore, as crude oil benchmark Brent futures dipped below US$33 per barrel again yesterday after Saudi Arabia ruled out a coordinated oil product cut that the weak energy market sorely needs.

New York's Dow Jones Industrial Average went down 1.14 per cent overnight, setting a bearish mood for markets in Asia Pacific.

The local benchmark Straits Times Index dropped 52.11 points or 1.95 per cent to 2,619.96, snapping its recent good run.

Tokyo was down 0.85 per cent, Hong Kong dropped 1.14 per cent, and Sydney closed down 1.9 per cent. Shanghai rose 0.88 per cent on a late-hour reversal after a volatile session.

Barclays senior economist Leong Wai Ho sees more uncertainties ahead: "Oil prices are depressed not only on the supply side; demand from manufacturing countries is also weak."

Twenty-six of the 30 STI constituents closed lower amid the selloff. Noble Group dropped 3.5 cents or 9.33 per cent to 34 cents, with 107 million shares transacted.

Noble, which will announce its on Feb 25, has earlier this week released a profit guidance highlighting a net loss for 2015. The loss came from valuation adjustments made to reflect weak coal prices.

Sembcorp Marine and Keppel Corp both dropped amid persistent negative buzz around oil prices and contract woes. Sembcorp Marine pared seven cents or 4.28 per cent to $1.565, and Keppel Corp was down 22 cents or 4.17 per cent to $5.05.

The impact of the slumping oil prices has spread to downstream oil and gas service providers, DBS analyst Ho Pei Hwa observed.

"PACC Offshore Services has recently taken a US$148 million impairment while Mermaid and Ezion have recently warned of asset impairments, guiding for a kitchen-sinking fourth quarter," she said in a recent note.

PACC Offshore Services closed flat at 29 cents. Mermaid Maritime was also flat, closing at 11 cents, while Ezion dropped one cent or 2 per cent to 49 cents.

Back on the STI, CapitaLand was among the losing counters, paring six cents or 2.05 per cent to $2.86. Its unveiling of an integrated project in the Orchard Road district this week did not impress the investors as Singapore's property market remains in a down cycle.

Only two blue chips rose, with Golden Agri-Resources gaining one cent or 2.74 per cent to 37.5 cents while SIA Engineering put on two cents or 0.58 per cent to $3.46.