Bulls And Bears

STI closes lower after volatile session

Trading affected by drop in oil prices and sell-off in Chinese equities

Local shares see-sawed in volatile trading yesterday before closing a tad lower after paring earlier losses caused by a fall in oil prices and a sell-off in Chinese equities.

The Straits Times Index ended 0.06 per cent, or 1.86 points, down at 2,949.95. It had lost as much as 20.71 points in late afternoon, dragged down by key blue chips.

CapitaLand slipped 1.6 per cent, or five cents, to $3.17; Keppel Corp fell 1.3 per cent, or eight cents, to $5.99; and Singtel dipped 0.3 per cent, or one cent, to $3.95.

OCBC Investment Research, which has a buy call on CapitaLand, noted the group posted a 35.4 per cent jump in net profit to $218.3 million for the first quarter, due mainly to the divestment of a property in Beijing. "Overall, we judge this quarter's numbers to be broadly in line with expectation," said OCBC.

Concerns that improving Chinese economic data may slow further government stimulus sent Shanghai shares down 2.3 per cent while Shenzhen dived 4.4 per cent - declines that weighed on bourses across Asia yesterday afternoon.

Traders say the sell-off may have been triggered after a top central bank economist said monetary policymakers will rein in excessive borrowing by firms and individuals.

News that Kuwaiti oil workers ended a three-day strike sent crude prices down, which hit oil and gas- related counters.

Ezra Holdings fell 2.9 per cent, or 0.3 cent, to 10.1 cents. Rex International slipped 3.6 per cent, or 0.4 cent, to 10.8 cents. Tech Oil and Gas dipped 2.7 per cent, or 0.5 cent, to 18.1 cents. But penny play Magnus Energy defied the trend, jumping 33.3 per cent, or 0.1 cent, to 0.4 cent, with 103.3 million shares traded.

Sembcorp Marine gained 1.9 per cent, or 3.5 cents, to $1.85 despite news that two drillships under construction at Jurong Shipyard for Transocean have had their delivery deferred by two years.

Other actively traded counters included Spackman Entertainment Group, which jumped 7.4 per cent, or one cent, to 14.5 cents, with 81.1 million shares traded, as investors cheered the company's restructuring efforts, including selling the loss-making Opus Pictures.

Sunvic Chemical Holdings was queried by the Singapore Exchange over unusual volume movement but said it could not explain the activity. The stock fell 2.2 per cent, or 0.3 cent, to 13.2 cents, with 26.7 million shares traded.

Meanwhile, China Star Food Group had a good debut on Catalist, jumping to 29 cents, up 26 per cent from its placement price of 23 cents. Some 24.6 million shares changed hands.

Singapore Airlines gained 0.9 per cent, or 10 cents, to $11.60, after DBS Group Research maintained a buy call, calling it a "beneficiary of the current low oil price environment".

"Furthermore, SIA has the potential to pay more dividends as earnings recover, and it has over $3 billion net cash on its balance sheet."

A version of this article appeared in the print edition of The Straits Times on April 21, 2016, with the headline 'STI closes lower after volatile session'. Print Edition | Subscribe