Bulls And Bears

STI dips on lower oil prices, news on Trump

Index weighed down by UOB, which suffers increase in its non-performing loans balance

Singapore shares fell slightly yesterday as investors contemplated lower oil prices and news that Republican presidential candidate Donald Trump was leading in a few key states.

The Straits Times Index closed down 0.23 per cent, or 6.55 points, to 2,807.14, weighed down by United Overseas Bank, which sank 1 per cent, or 19 cents, to $18.53.

UOB Kay Hian, which had a "not rated" call on the bank, said the "increase in UOB's non-performing loans balance at $440 million quarter on quarter was significant".

The increase was mainly due to exposure to the oil and gas sector.

UOB management has identified "marginal players in the O&G sector through its stress tests, and has classified a majority of these vulnerable accounts as non-performing loans".

But the broker had a buy call on OCBC Bank, which was flat at $8.50.

UOB Kay Hian said OCBC's better results were due to robust contribution from life insurance and net trading income. "OCBC is better positioned to weather the slowdown in the domestic economy due to its conservative management," it said.

DBS shares jumped 0.1 per cent, or two cents, to $15.01.

RHB, which has a buy call on the bank, said its acquisition of ANZ's wealth management and retail banking units in five markets would "underpin growth at its wealth management business, which we rate positively".

DBS expects the acquisition of ANZ's banking businesses to add to its income from next year, it said.

RHB added that although it expects asset quality to deteriorate further, it is forecasting wider net interest margins on higher interest rates.

Commodity heavyweights Golden Agri-Resources and Wilmar International weighed on the local market as oil prices slumped for the fourth day on news of the increase in the United States oil inventory.

Golden Agri fell 3.9 per cent, or 1.5 cents, to 36.5 cents with 34.2 million shares traded, while Wilmar slipped 1.2 per cent, or four cents, to $3.28.

Global Logistic Properties was the most actively traded counter, jumping 8.7 per cent, or 15.5 cents, to $1.945, with nearly 139 million shares traded.

The stock rallied on speculation that the Singapore-listed logistics facilities provider has attracted takeover interest from several parties, including China's sovereign fund. The company said in response to a Singapore Exchange query about the price surge that "it is not in discussions with the above referenced investor group at this time".

Other actively traded counters included QT Vascular, which fell 4.5 per cent, or 0.5 cents, to 10.5 cents, with 128.7 million shares traded. Noble Group dipped 1.8 per cent, or 0.3 cents, to 16.2 cents with 90 million shares traded. Spackman lost 6.2 per cent, or 0.8 cents, to 12.2 cents, with 30.4 million shares traded.

A version of this article appeared in the print edition of The Straits Times on November 03, 2016, with the headline 'STI dips on lower oil prices, news on Trump'. Print Edition | Subscribe