Bulls And Bears

Traders play it safe amid risky conditions

STI slips despite Wall Street cheer last week; investors brace themselves for Fed rate hike

Local equities made a limp start to the week yesterday, as traders continued to tread with caution on worries over the global economy.

The benchmark Straits Times Index slipped 14.42 points, or 0.49 per cent, to 2,903.49. Volume across the bourse was 1.01 billion units worth a lacklustre $685.1 million.

The slide came even after Wall Street added 0.51 per cent last Friday, lifted by a surge in Nike stocks.

Markets elsewhere in the region offered little direction as investors braced themselves for the upcoming interest rate hike in the United States, set for next month.

Shanghai slid 0.56 per cent, while Hong Kong dipped 0.39 per cent. Japan's financial markets were closed for a public holiday.

"This is not a really welcoming environment for risk taking," Mr Tim Condon, head of Asia research at ING Financial Markets in Singapore, told Bloomberg.

"Liquidity is beginning to dry up as people are waiting for what happens in December with the Fed. Worries about China persist."

The oil price drop, which dragged Brent crude down about 2 per cent to US$43.78 a barrel as at 7.45pm yesterday, did little to lift sentiment.

At home, losses were led by the three local lenders, with United Overseas Bank falling 25 cents or 1.25 per cent to $19.77.

OCBC Bank shed 11 cents or 1.23 per cent to $8.82, while DBS Group Holdings was down 12 cents or 0.71 per cent to $16.78.

Commodity trader Noble Group lost half a cent or 1.21 per cent to 41 cents, reversing its earlier gains during the day. Telco Singtel sank four cents or 1.03 per cent to $3.85.

Shipping firm Neptune Orient Lines (NOL) was one of the few bright spots for the day, jumping five cents or 4.46 per cent to $1.17. This was after the company confirmed over the weekend that it is in exclusive talks with French shipping giant CMA CGM on a potential sale.

OCBC Investment Research said in a note that there is a 23 per cent upside to NOL's book value of about $1.38, based on the closing price of $1.12 last Friday.

Genting Singapore also fared well, rising one cent or 1.35 per cent to 75 cents, while shipbuilder Yangzijiang Shipbuilding Holdings rose 1.5 cents or 1.36 per cent to $1.115.

Upstream oil and gas company KrisEnergy put on 1.5 cents or 4.92 per cent to 32 cents, after announcing it received government approval of the Production Area Application for an area containing the Rossukon oil discovery in the Gulf of Thailand.

On the Catalist board, new entrant Astaka Holdings closed at 24 cents, below its opening price of 24.5 cents.

The listing of the Malaysia-based property developer, which focuses on high-end projects in Iskandar, brings the total market capitalisation of the 169 companies listed on the board to $10 billion.

Elektromotive Group was the day's most active stock, with 70 million shares changing hands. It was flat at 0.4 cent.

A version of this article appeared in the print edition of The Straits Times on November 24, 2015, with the headline 'Traders play it safe amid risky conditions'. Print Edition | Subscribe