Bulls And Bears

Stocks continue slide as investors stay away

But Mitsubishi Corp's purchase of over 221m Olam shares boosts trading volume

Local shares stayed in the red in another tepid session as investors stayed mostly on the sidelines to avoid uncertainty piling up on both the domestic and foreign fronts.

The benchmark Straits Times Index (STI) dropped another 29.53 points, or 1.03 per cent, to 2,841.94 yesterday in a poorer outing than Monday's 0.6 per cent loss.

About 1.32 billion shares worth $1.42 billion changed hands yesterday, but the unusually strong volume was the result of a married deal at Olam International, the most active counter yesterday with some 222 million shares transacted.

The vast bulk of the Olam shares traded, more than 221 million, related to Mitsubishi Corporation's purchase from Olam's founding member, the Kewalram Chanrai Group, at $2.75 apiece, as part of its deal to partner the commodity company. Olam gained 1.5 cents, or 0.76 per cent, to $2.

Otherwise, the market was largely quiet, remisier Alvin Yong said.

"I see some portfolio rebalancing, with some people bargain-hunting among the small and mid-caps, while many others took their money off the table," he said. "The Fed rate hike is still on investors' minds. I believe there's a good chance that it will be announced this week, and if so, we will see the market trading sideways with a bearish bias."

Of the 30 STI blue chips, 22 closed lower, with Noble Group the weakest, sinking 1.5 cents, or 3.16 per cent, to close at 46 cents.

City Developments fell 20 cents, or 2.44 per cent, to close at $7.98. The property group's shares, which have been under pressure since April, were hammered again yesterday following news that Metro will close its outlet at City Square Mall.

Banking stocks also struggled, with DBS Group Holdings paring 13 cents, or 0.74 per cent, to close at $17.49. OCBC dropped seven cents, or 0.78 per cent, to $8.92, while United Overseas Bank closed 18 cents, or 0.92 per cent, lower at $19.30.

Stocks of the trio have yet to benefit from the hiking of the Singapore Interbank Offered Rate, currently sitting at around seven-year highs.

At the other end of the ledger, SIA Engineering was the top-gaining blue chip, adding eight cents, or 2.24 per cent, to close at $3.65.

Genting Singapore put on one cent, or 1.39 per cent, to 73 cents. But the gaming company is not out of the woods yet as the depreciation of regional currencies against the Singapore dollar will likely erode its earnings, warned Union Gaming Securities Asia last week.

Asian markets were a mixed picture. Kuala Lumpur rose 0.46 per cent as the upbeat mood over the government's stimulus measures continued. Tokyo also gained on good news, up 0.34 per cent after the central bank pledged to maintain its stimulus measures.

In China sentiment was more downbeat amid persistent signs of economic slowdown there. Shanghai tumbled 3.52 per cent and Hong Kong pared 0.49 per cent.

A version of this article appeared in the print edition of The Straits Times on September 16, 2015, with the headline 'Stocks continue slide as investors stay away'. Print Edition | Subscribe