Profit taking weighs down on Singapore markets, STI closes 13 points down

The benchmark Straits Times Index fell 0.48 per cent or 13.49 points to 2,823.51.
The benchmark Straits Times Index fell 0.48 per cent or 13.49 points to 2,823.51.PHOTO: REUTERS

SINGAPORE - Singapore shares took a breather after last week's 7.1 per cent rally, with profit-taking on some blue-chip constituents weighing down index.

The benchmark Straits Times Index fell 0.48 per cent or 13.49 points to 2,823.51, dragged down by Singtel, which slipped 1.6 per cent or six cents to S$3.75 and OCBC, which dipped 0.8 per cent or seven cents to S$8.72. Hong Kong Land sank 2.1 per cent or 13 US cents to USS$6, while Thai Beverage lost 1.9 per cent or 1.5 cents to 75.5 cents.

"It's a healthy correction," remisier Alvin Yong said.

DBS Group continued to rally, rising 0.1 per cent or two cents to S$15.38.

The offshore marine sector including Keppel Corp, Sembcorp Industries and Sembcorp Marine, one of the most battered during the January sell-down, extended their rebound on Monday as oil prices look set to firm further.

Technically, Brent crude has upside potential to US$39 per barrel at least, DBS Bank analyst Yeo Kee Yan said in a report on Monday.

Keppel jumped 1.6 per cent or 10 cents to S$6.20, Sembcorp Industries rose 1.6 per cent or five cents to S$3.19, while SembMarine climbed nearly 2 per cent or 3.5 cents to S$1.80.

Oil and gas plays were among the most actively traded. Ezra Holdings skyrocketed 27 per cent or 2.2 cents to 10.3 cents, with 332.1 million shares traded.

Commodities counters including Noble Group also got a lift, climbing 7.1 per cent or three cents to 45 cents, with 212.7 million shares traded.

"Our view for the Singapore equity market to hit an inflexion point at 2,500 has been vindicated. We keep our view for the STI to head towards 2,900," Mr Yeo said.

"We treat the current rise as a strong counter-trend rally rather than the start of a new bull market. Given the sharp rise over the past 2 weeks, we expect a pullback from the 2,840 level," he said, citing an uncertain global outlook.

"Despite the prospect of further monetary policy easing, a big challenge facing equities this year is that investors are increasingly doubtful about the central banks' ability to lift their respective economies through monetary easing. Singapore will continue to feel the effect of a challenging macro environment as it is an externally driven economy."

According to RHB Research, the rebound in oil prices is giving some reprieve to local banks, "given the vulnerability of their oil and gas exposures to an extended period of low oil prices."

Banking counters have rebounded off their lows in mid-February as investors took some comfort from details provided on exposures to the oil & gas sector, and China, two keys areas of asset quality concerns. Sentiment also improved after the banks expressed confidence that their non-performing loan ratios would "peak below the global financial crisis levels, and the recent recovery in oil prices, which would ease pressure on asset quality."

gleong@sph.com.sg