A strong lead from Wall Street and China helped fuel a relief rally in Singapore shares yesterday.
But profit-taking and a weak European opening pared most of the gains after the Straits Times Index (STI) failed to cross the key 3,000-point mark. The STI jumped 1.8 per cent after opening, but gave back most of these gains in the afternoon, closing 0.36 per cent, or 10.51 points, higher at 2,955.94.
"Profit-taking took over," said remisier Alvin Yong. "Most traders tend not to hold positions over the weekend. They are also watching if the rebound in oil prices is sustainable, as that would indicate a recovery in global growth."
Weighing on the index were Singtel, which slipped 1.3 per cent or five cents to $3.80 and CapitaLand, which fell 2.7 per cent or eight cents to $2.85. Banking counters DBS Group Holdings slid 0.4 per cent or eight cents to $18.01, and OCBC fell 0.8 per cent or seven cents to $9.10.
Also capping positive sentiment is uncertainty over whether the rate lift-off will be delayed further. This comes after conflicting comments emerged from US Federal Reserve officials at a key meeting of central bankers at Jackson Hole.
Kansas Fed president Esther George said interest rates should be normalised next month, a day after New York Fed chief William Dudley said an interest rake hike next month seemed less compelling.
Higher oil prices helped lift oil counters including Keppel Corp, which jumped 1.1 per cent or eight cents to $7.04, and oilfield services firm Ezra Holdings, which gained 7 per cent or 0.8 cent to 12.2 cents, with 378.9 million shares traded.
Ezra, the most actively traded counter yesterday, inked a deal to sell half of its sub-sea services business, EMAS AMC, to Japanese oil and gas giant Chiyoda.
Chiyoda will pay US$180 million (S$252 million) in cash for a 50 per cent stake in the unit, which values EMAS at US$360 million in terms of equity, Ezra said. Including the US$530 million of third-party net debt that EMAS holds and another US$360 million in long-term funding from Ezra, the total deal is valued at US$1.25 billion, it added.
Meanwhile, Noble rose nearly 1 per cent or 0.5 cent to 52 cents, with 103.7 million shares traded, on positive sentiment from news that Japanese conglomerate Mitsubishi will take a 20 per cent stake in Olam International, in two deals worth a combined $1.53 billion.
The first will see Mitsubishi buy 332.7 million new shares; in the second, Olam's founding investor, the Kewalram Chanrai Group, agreed to sell an 8 per cent stake to the Japanese company.
After these transactions, Mitsubishi will become Olam's second largest shareholder with a 20 per cent stake after state investment firm Temasek, which will have a 51.4 per cent stake. "That's a godsend for Olam, and it also affirms Temasek's earlier decision to invest in Olam shares and bonds," said Mr Yong.