Singapore shares fall as latest North Korea missile test weighs over sentiment

The local benchmark Straits Times Index dropped 11.39 points, or 0.35 per cent, to 3,209.56.
The local benchmark Straits Times Index dropped 11.39 points, or 0.35 per cent, to 3,209.56.PHOTO: ST FILE

SINGAPORE - Singapore shares fell on Friday (Sept 15) after North Korea fired another missile over Japan in a show of defiance against tightening sanctions and condemnation from other countries.

The local benchmark Straits Times Index dropped 11.39 points, or 0.35 per cent, to 3,209.56.

Shanghai also fell, losing 0.5 per cent, but other Asian markets shrugged off the day's news, with Hong Kong adding 0.1 per cent, Tokyo rising 0.52 per cent and even Seoul gaining 0.4 per cent.

Hirokazu Kabeya, chief global strategist at Daiwa Securities told Reuters: "There have been reports (for a while) suggesting North Korea is preparing a missile launch, so this was by no means a surprise.

"In a way, this seems like something markets have already experienced before, thus producing a limited reaction."

Mr James Soutter, a portfolio manager at K2 Asset Management in Melbourne, told Bloomberg News: "This is more of a continuance of provocation. Hence markets won't like it, but I don't think it's necessarily the precursor to a sustained market pullback."

Keppel Corp fell five cents to S$6.24, after it said that it would launch an initial public offering of a United States commercial real estate investment trust on the main board of the Singapore Exchange which will be jointly sponsored by Keppel Capital and KBS Pacific Advisors.

According to a Wall Street Journal report, the Reit listing is expected to raise about US$500 million and is in line with Keppel's aim to grow its fund management business.

OCBC Investment Research maintained its "buy" call on Keppel, with a target price of S$7.36.

Banking stocks continued to slip, with DBS Group down 29 cents to S$20.06, OCBC Bank shedding 5 cents to S$10.95 and United Overseas Bank dropping 11 cents to S$23.05.

Banking shares have been punished this year despite solid quarterly results, amid renewed concerns about the sector's exposure to oil and gas companies, which are still bogged down by losses, weak revenues and challenges in debt repayment.