Bulls And Bears

STI languishes ahead of key US job report

Non-farm payroll data could offer hints as to when Federal Reserve will next hike rates

Singapore shares found no reprieve yesterday, finishing weaker for a fourth straight day ahead of a key job report in the US.

The Straits Times Index (STI) lost 4.12 points or 0.15 per cent to 2,816.47, despite advancing earlier in the day. Only 987.1 million shares worth $851.3 million changed hands across the bourse.

Markets elsewhere in Asia were a mixed bag. A report showing mainland China's factory activity in August climbed to its highest level in nearly two years sent Hong Kong up 0.81 per cent. But Shanghai retreated 0.72 per cent, likely dragged down by worries that the authorities will hold off fresh stimulus measures.

Tokyo rose 0.23 per cent, while Sydney shed 0.32 per cent and Jakarta fell 0.96 per cent.

Wall Street eased 0.29 per cent overnight as investors braced themselves for the upcoming non-farm payroll report, due out after the market closes tonight US time - which could offer hints as to when the next rate hike will take place.

"I think the market is coming to grips with a higher probability that the Fed may move in September," Mr Robert Pavlik, chief market strategist at Boston Private Wealth, told Bloomberg.

"A possible Fed rate hike creates some near-term worries - that's what you're seeing play out."

Of the 30 STI constituents, nine rose, 13 fell and eight were flat.

Weighing down the index was Singtel, which sank five cents or 1.2 per cent to $3.97 in heavy trade. Palm oil giant Golden Agri-Resources also fared poorly, shaving off half a cent or 1.4 per cent to 35.5 cents, while airport services firm Sats continued its downward trajectory, sliding six cents or 1.3 per cent to $4.65.

On the other side of the ledger, Singapore Airlines was among the biggest gainers, advancing 12 cents or 1.1 per cent to $10.62, after posting losses since Monday.

OCBC Investment analyst Eugene Chua said in a report: "If the Zika virus continues to pose problems in Singapore over a prolonged period, inbound and outbound traffic will likely be hit. With SIA using Singapore as its main hub, we believe its business will be (hit) by the resulting lower passenger traffic."

But he added it is still too early to determine any impact, maintaining a "hold" call on the stock with an unchanged fair value of $11.56.

Outside of the blue chips, content producer mm2 Asia rose 1.5 cents or 1.9 per cent to 79 cents, after proposing a one-into-two share split. The company said the split will help increase its market liquidity while broadening its shareholder base.

Offshore marine plays continued to be in play. Vallianz Holdings, for instance, slumped 0.2 cent or 9.5 per cent to 1.9 cents.

The most heavily traded stock was Asia-Pacific Strategic Investments, a provider of integrated bereavement services, which surged 0.1 cent or 25 per cent to half a cent on 130.9 million shares done.

A version of this article appeared in the print edition of The Straits Times on September 02, 2016, with the headline 'STI languishes ahead of key US job report'. Print Edition | Subscribe