Bulls And Bears

Triple whammy batters Singapore shares

STI hit by weak results from blue chips, oil price plunge, likely US rate hike next month

The bad news came on three fronts yesterday and sent shares down to close the week on a sour note.

Sentiment was battered by disappointing third-quarter earnings from some blue chips, plunging oil prices and growing expectations that United States interest rates will rise next month.

The Straits Times Index responded by closing 1.13 per cent, or 33.33 points, down at 2,925.68, leaving it down 2.8 per cent for the week.

Banking counters gave the STI a major hit yesterday: OCBC fell 0.9 per cent, or eight cents, to $8.92; DBS was off 0.6 per cent, or 10 cents, to $17.14; and UOB slid 0.6 per cent, or 13 cents, to $20.15.

Noble Group was another loser, falling 11 per cent, or 5.5 cents, to 44.5 cents, with 122.3 million shares traded after third-quarter net profit slumped 84 per cent to US$24.7 million (S$35.1 million). Chief financial officer Robert van der Zalm resigned on the day of the earnings announcement.

Another STI constituent, Genting Singapore, slipped 4.3 per cent, or 3.5 cents, to 78 cents, with 45.9 million shares traded. This came after an unexpectedly large third-quarter bad debt provision, coupled with fallout from a slowing Chinese economy, sent net profit tumbling 62 per cent to $37.2 million from $97.4 million a year earlier.

Maybank Kim Eng, which downgraded the stock to "hold" from "buy", noted that its third-quarter results "disappointed on record-high doubtful debts. VIP volume share unlikely to recover, in our view".

Oil played its part in the STI fall as well. Crude prices hit 21/2-month lows after the US government reported that its stockpile was four times above market expectations. West Texas Intermediate crude tumbled to US$41.55 a barrel in Asian trade.

The fallout saw Keppel Corp dip 1.3 per cent, or nine cents, to $6.81, while Sembcorp Industries fell 2.04 per cent, or seven cents, to $3.36.

Smaller players felt the pain as well, with Ezra down 2.6 per cent, or 0.3 cent, to 11.3 cents; Nam Cheong shedding 6.2 per cent, or one cent, to 15.2 cents; and Rex International dropping 2.3 per cent, or 0.3 cent, to 12.9 cents.

Meanwhile, UG Healthcare Corp and Halcyon Agri were queried by the Singapore Exchange on "unusual price movement in their shares". UG jumped 7.7 per cent, or three cents, to 42 cents, while Halcyon gained 5.8 per cent, or four cents, to 73.5 cents.

Penny plays were again the most actively traded. Stratech Group plunged 18 per cent, or 0.9 cent, to 4.1 cents, with 82.8 million shares traded, and Biosensors dipped 0.6 per cent, or 0.5 cents, to 80 cents, on 56.4 million shares changing hands.

Spackman Entertainment continued to attract punters, gaining 5.2 per cent, or 0.6 cent, to 12.2 cents, with 97.2 million shares traded. This was after it announced that its mystery drama The Priests held the top spot at the Korean box office, trumping new James Bond flick Spectre.

A version of this article appeared in the print edition of The Straits Times on November 14, 2015, with the headline 'Triple whammy batters Singapore shares'. Print Edition | Subscribe