Bulls And Bears

STI falls further ahead of US Fed meeting

Investors await clues on whether key interest rates will be raised for a third time this year

Singapore stocks continued downhill yesterday amid a mixed showing in Asia as traders were treading water ahead of a keenly watched United States Federal Reserve policy decision.

The benchmark Straits Times Index (STI) lost 7.88 points or 0.24 per cent to 3,218.07, clocking a second straight day of losses. Turnover across the bourse was thin at 1.51 million shares worth $778.8 million.

Elsewhere in Asia, Tokyo inched up 0.05 per cent, while Shanghai and Hong Kong each climbed 0.27 per cent. Sydney dipped 0.08 per cent and Kuala Lumpur pared 0.17 per cent.

Investors kept to the sidelines as they awaited the outcome of the US Federal Open Market Committee meeting - which will be out today. The Fed is expected to unveil plans to unwind its US$4.5 trillion (S$6 trillion) balance sheet and provide clues as to whether it will raise interest rates for a third time this year.

Some of the biggest laggards on the STI yesterday were Jardine Strategic Holdings, which fell 2.5 per cent or US$1.18 to US$45.20, and CapitaLand Mall Trust, down 1.9 per cent or four cents to $2.05.

Developers also did poorly, such as City Developments, which lost 1.5 per cent or 17 cents to $11.28, while transport group ComfortDelGro continued to take a hit, dropping 1.2 per cent or 2.5 cents to $1.985. This came as the Land Transport Authority announced last Friday that SMRT Trains had won the tender to operate and maintain the Thomson-East Coast Line, beating ComfortDelGro's unit SBS Transit.

On the other side of the ledger, Singapore Press Holdings rose 0.8 per cent or two cents to $2.63, while Singtel put on 0.5 per cent or two cents to $3.70.

OCBC Bank added 0.1 per cent or one cent to $11.01 on news that its insurance arm, Great Eastern Holdings, is said to have engaged at least one Malaysian bank to explore selling a large stake in its Malaysian operations for as much as US$1 billion.

A DBS Group Research report said that the potential sale may unlock some "small value" for OCBC shareholders, maintaining a "buy" call on the stock.

The day's top traded counter was real estate firm Rowsley, which slid 2.2 per cent or 0.3 cent to 13.1 cents on 271 million shares done. The stock has been among the most active in recent months, with 3.17 billion shares changing hands last month.

Other actives included Metech International, unchanged at 0.4 cent, and ASTI Holdings, which jumped 12.5 per cent or one cent to nine cents.

ASTI Holdings on Tuesday said it has entered into a non-binding term sheet with China Fortune-Tech Capital Co to divest the STI Group, which would strengthen its balance sheet and allow it to explore other opportunities. The sum of the deal, which is still being negotiated, could range from $105 million to $115 million.

A version of this article appeared in the print edition of The Straits Times on September 21, 2017, with the headline 'STI falls further ahead of US Fed meeting'. Print Edition | Subscribe