Bulls And Bears

STI slides further with little relief in sight

All 3 local banks lose ground as global growth woes continue to worry regional investors

Singapore shares lost ground for the ninth straight session yesterday as the gloom pervading markets in the region showed no signs of letting up.

The benchmark Straits Times Index (STI) remained under pressure, sliding 5.26 points, or 0.19 per cent, to 2,767.81. Wall Street failed to offer any positive leads with a 0.6 per cent dip overnight, as traders stayed on the sidelines ahead of the non-farm payrolls report out today.

Concerns over global growth were again a drag on other markets in Asia: Hong Kong fell 0.37 per cent, Taipei pared 0.2 per cent and Kuala Lumpur dropped 0.75 per cent. Shanghai was up, but only by a marginal 0.22 per cent. A private survey showed China's service sector grew at a slower pace last month than in March, failing to shore up confidence that the country was seeing a solid economic rebound.

Tokyo, Seoul, Jakarta and Bangkok were closed for public holidays.

"The overall sentiment is disbelief," Mr Michael McCarthy, chief market strategist at CMC Markets Asia-Pacific, told Bloomberg. "Investors are struggling to reconcile valuations with the risks. It's going to remain a difficult environment."

At home, OCBC Bank fell nine cents or 1.1 per cent to $8.44, while United Overseas Bank was down 19 cents or 1 per cent to $18.10. DBS Group Holdings, which paid a final dividend of 30 cents, traded ex-dividend, dropping 34 cents or 2.2 per cent to $15.01.

A Moody's Investors Service report yesterday said that the banks' first-quarter results "reveal a further weakening in their asset quality and/or profitability from the levels seen as at year-end 2015".

"We expect that the asset quality of all three banks will continue to deteriorate because of the slowing economic and trade growth in Asia, and stress on oil and gas borrowers in Singapore," it added.

Sembcorp Industries rose nine cents or 3.3 per cent to $2.84. Most analysts maintained a "buy" call on the stock given the group's pipeline of utilities projects, even though net profit sank 24.7 per cent to $107 million during the first quarter.

ST Engineering jumped 18 cents or 5.9 per cent to $3.24, prompting a query from the Singapore Exchange (SGX). The group said it is in the process of selling an overseas subsidiary, but this would not affect key financials in the current year, adding it is not aware of any material information not previously announced that could explain the unusual trading.

HLH Group was the day's top active, surging 0.2 cent or 33.3 per cent to 0.8 cent on a volume of 67.5 million shares.

The agriculture and property firm on Wednesday evening said erroneous information was posted on the SGX StockFacts portal in February, which claimed the group had cancelled its acquisition of a land parcel in Cambodia. HLH clarified that the land is being marketed as the development site for D'Seaview, a project launched recently.

A version of this article appeared in the print edition of The Straits Times on May 06, 2016, with the headline 'STI slides further with little relief in sight'. Print Edition | Subscribe