BullsandBears

STI slips as sentiment stays subdued

Banks seen to remain a haven of stability as corporate results season approaches

Local shares were subdued yesterday, following two days of falls as investors cashed in on blue chips while keeping most of their attention on penny plays.

The benchmark Straits Times Index (STI) closed 2.8 points or 0.08 per cent down to 3,356.37. It had hovered around 3,370 before a late- hour selldown wiped off the gains. Altogether, 2.32 billion shares worth $1.03 billion changed hands

The lacklustre momentum at home reflected the tepid activity on Wall Street, where the Dow Jones Industrial Average fell for the second day running, losing 0.38 per cent as disappointing results from tech giants like Apple hit sentiment.

Singapore, too, is entering the corporate results season so stocks are expected to move in tandem with the financial figures, remisier Desmond Leong said.

"In terms of earnings outlook, oil and gas plays will likely remain weak and I expect key counters such as Keppel Corp to continue their recent poor form," he added.

Keppel Corp gained two cents or 0.25 per cent to $8.16 yesterday but is still down 2.9 per cent over the past month. Ezra Holdings shed 0.2 cent or 1.33 per cent to 14.8 cents and Ezion Holdings lost 0.5 cent or 0.55 per cent to 90.5 cents.

Singapore banks will remain a haven of stability, Mr Leong added, noting their consistently stable earnings and upcoming rate hikes as positive factors.

All three lenders have been rising over the past week, with DBS up six cents or 0.28 per cent to $21.38 yesterday. OCBC added seven cents or 0.68 per cent to $10.42, and United Overseas Bank ended four cents or 0.17 per cent higher at $23.42.

Hutchison Port Holdings Trust was the top gainer, up 1.5 US cents or 2.48 per cent to 62 US cents. It reported on Wednesday that second- quarter profit rose 8.5 per cent.

At the other end of the spectrum, Noble Group lost two cents or 3.08 per cent to close at 63 cents, on turnover of 127.5 million shares. It is likely the commodity firm undertook another round of share buybacks.

Meanwhile, the pennies were still rife with activity. CEFC International remained on punters' radar, gaining a further 12 per cent to 28 cents. It has now increased around tenfold, and investors will do well to avoid it, Mr Leong warned.

"Pennies are all about risk-taking, but caution is still necessary. My advice to investors interested in playing pennies is to look at stocks that are just starting to rise, say for the first one or two days. Beyond that, you have to be careful."

Overseas, China stayed on its recovery track, with Shanghai up for the sixth day to end 2.43 per cent higher, and Hong Kong gained 0.46 per cent. Investor confidence is slowly returning on the back of government support but the market may still move sideways, IG premium client manager Nabil Mattar said. Tokyo rose 0.44 per cent, but Kuala Lumpur fell 0.41 per cent in another turbulent session.

A version of this article appeared in the print edition of The Straits Times on July 24, 2015, with the headline 'STI slips as sentiment stays subdued'. Print Edition | Subscribe