Singapore shares closed flat yesterday, weighed down by weaker sentiment over DBS Group and United Overseas Bank (UOB) after Keppel Corp affiliate KrisEnergy sounded a warning on its debt covenants.
The Straits Times Index ended down 0.01 per cent or 0.19 point to 2,867.21, hit by DBS, which slipped 1.2 per cent or 18 cents to $14.86. UOB fell 1.5 per cent or 27 cents to $17.65.
KrisEnergy dropped 2.4 per cent or 0.3 cent to 12.1 cents after posting a second-quarter loss and warning that some covenants on debt agreements could come under stress in the near term as weaker oil markets hit revenue.
The oil and gas producer has a $200 million bond due in August 2018 and a US$148.3 million (S$199 million) secured revolving credit facility with DBS. It said it has engaged "external parties" to help look for ways to strengthen its capital structure.
Noble Group fell 3.4 per cent or 0.5 cent to 14.3 cents, with 92.4 million shares traded. Fitch Ratings noted that a liquidity crunch may be temporary and that it will probably generate about $900 million in the coming months, including proceeds from a recent rights issue.
Bucking the overall weak sentiment, Singtel gained 1.4 per cent or six cents to $4.31. Maybank Kim Eng, which has a buy call on the telco, said its "mobile data growth across all markets should provide solid support in a year when a new rival is expected".
Oil and gas-related plays, among the most actively traded, benefited from higher oil prices. Vallianz jumped 4.5 per cent or 0.1 cent to 2.3 cents, with 34.5 million shares traded, while Ezra was flat at 4.3 cents, with 33.2 million shares traded.
Meanwhile, small- to mid-cap counters such as Courts Asia, Yanlord Land Group and Delfi saw punting interest, market observers said.
"The market has regained some form of stability post-Swiber, and retail investors are punting undervalued small- and mid-cap companies, as some have announced better-than-expected results," remisier Alvin Yong said.
Courts Asia gained 4.8 per cent or two cents to 44 cents, after posting a nearly 56 per cent surge in first-quarter net profit to $9.42 million from a year ago.
Chinese property developer Yanlord rose 2 per cent or 2.5 cents to $1.265 after posting an 89 per cent jump in net profit for the second quarter to 323.95 million yuan (S$65.6 million), while group revenue surged to 7.4 billion yuan from 2.34 billion yuan.
Chocolate confectionery company Delfi soared more than 16 per cent or 38 cents to $2.70. RHB Securities upgraded its call to neutral from sell on an improved economic outlook. "We believe that easing inflation and a potential reduction in individual income tax will bode well for Indonesia's consumer sentiment in the near term," it said.