Banks and Singtel drag Singapore market lower

Showing in line with region, where Jakarta index sinks as attacks spook investors

Local shares stayed on a downward path yesterday, dragged lower by banks and Singtel.

The Straits Times Index shed 22.23 points or 0.62 per cent - its second straight losing session - to 3,540.23, with 1.4 billion shares worth $1.3 billion changing hands.

Its showing was in line with the region, where the Jakarta Composite Index was the biggest loser, sinking 1.8 per cent to take its retreat to 8.1 per cent for the year. Recent terror attacks in Indonesia have shattered confidence among investors, Bloomberg reported.

Locally listed stocks of firms with Indonesia-sourced revenue or assets there also suffered.

Plantation firms First Resources and Bumitama Agri, Indonesian property owners Lippo Malls Indonesia Retail Trust and Sinarmas Land, energy firm RH Petrogas and water treatment firm Moya Asia all finished lower.

Mr Eli Lee, head of investment strategy at Bank of Singapore, said: "Global equities fluctuated between losses and gains on Tuesday after clocking in a three-day rally as investors weighed persistent concerns of rising rates, Middle East tensions and trade frictions."

China's industrial output rose 7 per cent last month from a year earlier, exceeding forecasts, although slowing investment signalled a moderation in the coming months.

"Data from China showed that growth momentum is broadly intact with inflation and the credit situation under control," Mr Lee said.

"The more pressing worry is how China will resolve its trade spat with the US."

Locally, DBS fell the most of the three Singapore banks, down 1.2 per cent to $28.88 after Bloomberg ran an interview with chief executive Piyush Gupta discussing plans to expand its wealth management business, and the fact that the rise of robots could put banking jobs at risk.

Singtel fell nine cents to $3.43 ahead of its May 17 results. There is market talk that robust profit growth at its Australian unit Optus probably cannot offset declines at its domestic operations, which are struggling with falling average revenue per user. Bharti Airtel also remains a drag with its falling profits.

Hutchison Port Holdings Trust fell 1.5 US cents or 4.4 per cent to 32.5 US cents, and StarHub finished flat at $2.14, after both were demoted from the MSCI Singapore Index to a small-cap gauge.

Venture Corp was added to the index, which may also explain its price appreciation in the past few days, though it lost nine cents to $22.18.

A version of this article appeared in the print edition of The Straits Times on May 16, 2018, with the headline 'Banks and Singtel drag S'pore market lower'. Print Edition | Subscribe