Brexit weighs on Singapore stocks, STI closes 11 points down

Stock tickers along the wall at the Singapore Exchange (SGX) Centre 1 building.
Stock tickers along the wall at the Singapore Exchange (SGX) Centre 1 building.PHOTO: ST FILE

SINGAPORE - Brexit jitters continued to weigh Singapore stocks, which closed lower in thin trading as investors await the outcome of the referendum.

The Straits Times Index closed down 0.41 per cent or 11.42 points to 2,789.45, weighed down by Singapore Press Holdings, which dipped 1.8 per cent or 7 cents to S$3.78, and Singtel, which fell 0.3 per cent or one cent to S$3.84.

Selling this week ahead of the referendum should be limited as recent opinion polls show the outcome to be too close to call, market observers say.

"It's a 50-50 per cent chance of going either way. If the outcome is to "leave" the European Union, equity markets will likely react negatively," according to DBS Group Research.

But the STI is expected to hold up at around the 2,700 level.

"Unlike during the worst point of the Eurozone sovereign debt crisis back in October 2011, a financial contagion is not feared, and investors will be looking at central banks to play a crucial role in ensuring the stability of financial markets and stem any potential panic," DBS said.

A "stay" outcome should see a relief rebound back towards 2,900, with blue chip banks and rigbuilders that had lost ground in the past two weeks leading the charge, it said.

Companies with earnings exposure to the British pound will be more sensitive. These include City Developments, ComfortDelgro and SembCorp Industries. Defensive and yield stocks including M1, ST Engineering and Sheng Siong could outperform if the referendum results in the UK leaving the EU, DBS said.

Frasers Logistics and Industrial Trust made its debut at 90.5 Singapore cents and closed at 91 Singapore cents, above its 89 Singapore cents a share offering. Dealers attributed the stock's strong debut in a jittery market to its attractive yield and strong institutional investor interest. More than 140.2 million shares traded.

"This is one of the higher profile IPOs in months, and strong institutional interest resulted in the stock being oversubscribed about six times," KGI Fraser Securities trading strategist Nicholas Teo said.

Pennies are again the most actively traded, with Ezra Holdings falling 1.3 per cent or 0.1 cents to 7.7 cents. More than 91.7 million shares changed hands. Noble Group gained 4.7 per cent or one cent to 22.5 cents, with 69.6 million shares traded; while Loyz Energy fell 13.3 per cent or 0.4 cents to 2.6 cents, with 42.9 million shares traded. ISR Capital jumped 12.2 per cent or 1.1 cents to 10.1 cents, with 19.8 million shares traded.