Singapore bourse bucks regional trend, STI closes 17 points down

SINGAPORE - Singapore shares bucked the regional trend Thursday, closing lower amid renewed jitters that the United States Federal Reserve might raise interest rates soon.

The benchmark Straits Times Index ended the day down 16.83 points, or 0.55 per cent, to 3,023.65.

The glum mood returned after two days of gains, after Fed chairman Janet Yellen said overnight that the central bank might raise rates in December.

Tokyo-based Ichiyoshi Asset Management executive officer Mitsushige Akino told Bloomberg: "Yellen really means it when she says she wants to raise interest rates this year, so as long as employment or inflation doesn't disappoint, it remains a real possibility she will follow up on her words."

Most regional bourses, however, roseyesterday. Japan Post soared again after a stellar debut on Wednesday, pulling Tokyo up 1 per cent. Shanghai, still rejoicing stimulus measures announced by the Chinese central bank, gained 1.9 per cent.

Hong Kong closed unchanged.

Commodity plays at home, which have been battered amid slumping commodity prices, were mixed yesterday.

Noble Group slipped a cent to 51.5 cents, Wilmar lost a cent to $3.09, Golden Agri-Resources was flat at 38.5 cents and Olam International rose a cent to $2.01.

Yangzijiang Shipbuilding fell three cents to $1.22, after saying on Wednesday that its net profit for the third quarter ended Sept 30 fell 16 per cent.

Executive chairman Ren Yuanlin said the firm is battling stiff competition amid "one of the most challenging years in recent history" for the Chinese shipbuilding industry.

Ground handling and in-flight catering provider Sats climbed nine cents to $3.89, after saying on Wednesday that net profit for the second quarter rose 26.8 per cent.

CIMB Research analyst Lim Siew Khee maintained her "hold" call on the stock, noting that it has risen some 23 per cent in the past 12 months already.

SIA Engineering rose five cents to $3.98, after posting a 5.7 per cent increase in its second-quarter net income from the year before.

Maybank Kim Eng Research analyst Derrick Heng maintained his "hold" call on the stock, citing its valuation.

"The recent rebound in flight traffic at Changi Airport should benefit SIA Engineering's line maintenance business. Next year, airlines may increase capacity and slow their fleet retirement in response to lower oil prices," he wrote.

"This should drive a cyclical pick-up in the maintenance workload in the year ahead. However, we stay neutral on the stock as valuations remain unattractive."

yasminey@sph.com.sg