Singapore, regional bourses lose steam, STI closes 35 points down

SINGAPORE - Singapore shares lost their steam alongside the mostly downbeat regional markets, with investors pulling out after the oil price dropped another notch.

The crude oil benchmark Brent futures dropped below US$38 (S$51) a barrel, triggering a selloff that started overnight in the United States where Dow Jones Industrial Average pared 0.31 per cent, and the Asian markets followed suit.

Among the major regional markets, Shanghai was the only ending in the black, up 1.45 per cent. Hong Kong dropped 1.57 per cent, Tokyo shed 2.42 per cent, and Sydney closed down 1.42 per cent.

Singapore's benchmark Straits Times Index dropped a sizeable 34.43 points or 1.21 per cent to 2,800.92, its lowest in almost a month. Around 1.16 billion shares with a total worth of S$1.01 billion changed hands across the whole market.

Investors should brace itself for more oil price volatility at least in the near term, OCBC analyst Barnabas Gan told the Straits Times.

"The oil price rally over the past month or so was mostly predicated on the Opec (Organisation of the Petroleum Exporting Countries) push for a production freeze, but people are spook now as they see the rhetoric against it. The Doha talk is now expected to only maintain a status quo," he said.

Major oil producers have agreed to meet in Doha in mid-April to coordinate an output freeze, but Iran's outright refusal to curb its production has thrown a spanner in the effort.

Mr Gan added: "In the second quarter, I see oil prices rangebound to reach at best US$40 per barrel by the end of June."

As usual, the oil scare sent Singapore's offshore and marine stocks tumbling. On the STI, Keppel Corp dipped 15 cents or 2.63 per cent to S$5.55, and Sembcorp Marine closed down 6.5 cents or 4.05 per cent to S$1.54.

The smaller plays also suffered. Ezion Holdings slipped two cents or 3.7 per cent to 52 cents, while Nam Cheong closed down 0.6 cents or 5.88 per cent at 9.6 cents. Ezra Holdings dropped half a cent or 5.1 per cent to 9.3 cents; it's also Tuesday's top active counter, with 80.4 million shares transacted.

Back on the STI, 25 of the 30 constituent stocks ended lower. Outside the STI, SPH Real Estate Investment Trust closed down 0.5 cents or 0.52 per cent at 96.5 cents, a day after announcing a distribution per unit of 1.4 cents - unchanged from the same period last year - for the quarter to Feb 29.

whwong@sph.com.sg