STI closes 0.02% lower for the week after five straight sessions of decline

SINGAPORE - The local market ended the day lower amid a region-wide pullback, as fresh signs of economic weakness in China emerged to shake investor confidence.

The benchmark Straits Times Index (STI) was down 3.72 points or 0.11 per cent to 3,352.65, as 1.68 billion shares worth US$959.3 million changed hands across the entire market on Friday.

For the week, STI closed 0.02 per cent lower after five straight sessions of decline.

The same downbeat sentiment gripped all key regional markets yesterday, with Shanghai losing 1.29 per cent and Hong Kong down 1.06 per cent. This came as a flash estimate showed that China's purchasing managers' index for July hit a 15-month low, stirring up fears that the economy's slowdown is greater than expected.

Even in Japan, where a similar estimate showed an improved PMI, main index Nikkei still dropped 0.67 per cent, while sentiments at Wall Street were equally downbeat as disappointing corporate results sent Dow Jones Industrial Average down 0.67 per cent.

But the market at home still had its bright spots. On the STI, Singapore Airlines stood out as the top performer, closing 21 cents or 1.84 per cent up at US$11.63 to recoup much of its loss this week.

In his recent note, Maybank Kim Eng analyst Mohshin Aziz maintained his hold rating for the carrier, noting: "Demand is stagnant but low fuel price could be the next catalyst for growth. Further industry consolidation in the second half and pick-up in the cargo market should improve outlook."

Ascendas Real Estate Investment Trust rose four cents or 1.64 per cent to S$2.48. The industrial property Reit has been on an uptrend since Wednesday when it reported a 5.5 per cent increase in distribution per unit for the quarter ended June 30.

Another Reit that reported its quarter results this week was Suntec Reit, which reported on Thursday a 10.3 per cent rise in DPU for the three months to June 30. The good news sent the counter up 1.5 cent or 0.87 per cent to S$1.73.

DBS gained two cents or 0.09 per cent to S$21.4, ahead of its earnings announcement next Monday, when bank is expected to deliver another set of strong earnings.

On the other end of STI, Jardine Cycle and Carriage dropped the most, losing 75 cents or 2.41 per cent to S$30.33. Jardine Strategic Holdings lost 65 US cents or 2.03 per cent to US$31.35.

Keppel Corp and Sembcorp Marine both ended yesterday lower, as the outlook for offshore and marine companies remains dim. Keppel closed four cents or 0.49 per cent down to S$8.12, after reporting a 2.3 per cent drop in net profit for the quarter to June 30. Sembcorp Marine lost one cent or 0.36 per cent to S$2.80.

But Nomura analysts still retain their buy rating for Sembcorp Marine, as they reiterated in a recent note that deep water rig orders could recover later this year, a trend that will benefit Sembcorp Marine as it rides on its market share.