Bulls And Bears

STI starts new week on wobbly footing

Political uncertainties worldwide dampen traders' outlook and weigh on Asian markets

Singapore equities remained under pressure as traders assessed a range of elections that renewed concerns over political uncertainty.

German Chancellor Angela Merkel won the election, but with a poor result amid rising support for the far-right, while New Zealand's ruling National Party also won, but failed to secure a ruling majority.

The benchmark Straits Times Index (STI) slid 4.34 points, or 0.13 per cent, to 3,215.91, while turnover across the bourse was just 1.02 billion shares worth $818 million.

Most other markets in Asia closed in the red as well, led by Hong Kong, which slumped 1.36 per cent. Shanghai fell 0.33 per cent and Seoul was down 0.35 per cent.

Tokyo bucked the trend with a 0.5 per cent gain on news that Japanese Prime Minister Shinzo Abe plans to compile a new economic stimulus package of around two trillion yen (S$24 billion) by year end.

Where sentiment is still positive, IG market strategist Jingyi Pan believes this is due to anticipation of the United States' tax reform plan, which may come in as early as today.

"(The) US Republicans' tax reform revelation could be the key theme for the week and would likely keep markets on their toes for the details. With US indices hanging near all-time highs, this will be crucial to watch," said Ms Pan.

On the STI, Sats was among the biggest laggards, falling 1.7 per cent or eight cents to $4.57, along with Hutchison Port Holdings Trust, which slid 1.1 per cent or half a US cent to 44.5 US cents.

CIMB in a note cut its call on Sats from "hold" to "reduce", noting that while the group faces less structural disruptions compared with other firms like ComfortDelGro, pressure from passenger yields may trickle down to its margins as Singapore Airlines combats fierce competition from regional airlines.

The local lenders were a mixed bag: OCBC Bank advanced 0.1 per cent or one cent to $11.16, DBS Group Holdings climbed 0.05 per cent or one cent to $20.62, while United Overseas Bank dipped 0.04 per cent or one cent to $23.46.

Yangzijiang Shipbuilding pulled back 1.1 per cent or 1.5 cents to $1.395. OCBC Investment Research noted in a report that the group's share price has dropped about 13 per cent since its share placement announcement on Aug 31.

"The group is financially robust... (and) as such, there have been questions on the need to raise funds, unless the group is preparing to undertake a significant merger and acquisition ahead," it said.

Blue-chip gainers included Golden Agri-Resources, which rose by a solid 2.6 per cent or one cent to 39 cents, and CapitaLand Commercial Trust, up 1.8 per cent or three cents to $1.70.

E-waste management solutions provider Metech International was the day's most heavily traded stock with 103.8 million shares changing hands. The counter sank 25 per cent or 0.1 cent to 0.3 cent.

A version of this article appeared in the print edition of The Straits Times on September 26, 2017, with the headline 'STI starts new week on wobbly footing'. Print Edition | Subscribe