EU stimulus moves fail to impress investors

S'pore traders join global counterparts to ditch shares; SGX queries unusual activities

Singapore shares joined a global sell-off as the scale of stimulus from the European Central Bank (ECB) underwhelmed the market.

Investors were also sidelined ahead of widely anticipated United States employment data, released after the market closed yesterday.

The Straits Times Index closed 0.17 per cent, or 4.84 points, lower at 2,879.05. For the week, it managed to eke out a 0.7 per cent gain.

Asia followed a weak European lead after ECB president Mario Draghi announced a deposit-rate cut and bond-buying extension that fell short of expectations.

A slew of trading queries were issued by the Singapore Exchange yesterday.

Jardine Cycle & Carriage, one of the leading laggards, was hit with a "trade with caution" after it wasn't able to explain a "substantial increase in its share price by 6.45 per cent on Dec 3". Jardine fell 1.9 per cent, or 68 cents, to close at $35.20. Corp and SBS Transit were queried for unusual trading activity after their share prices increased following Transport Minister Khaw Boon Wan's hints during a forum yesterday that there will be a restructuring of the rail industry.

SMRT rose 5.4 per cent, or eight cents, to $1.56, while SBS climbed 5.2 per cent, or 10 cents, to $2.02.

Terratech Group was queried about unusual price and volume movements, after spiking 88 per cent, or 2.2 cents, to 4.7 cents, with 33.7 million shares traded. Imperium Crown was queried about unusual price movement, after jumping 14.9 per cent, or 1.1 cents, to 8.5 cents, with 29.7 million shares traded.

Meanwhile, STI component stocks struggled, with Yangzijiang Shipbuilding falling 2.22 per cent, or 2.5 cents, to $1.10.

Analysts continue to issue sell calls on rig-builder Sembcorp Marine, which dipped 0.8 per cent or 1.5 cents to $1.88 yesterday. RHB, which maintained a "top sell" call, sees SembMarine's standstill agreement with North Atlantic Drilling as "a compromise against the customer having to cancel the contract due to a potential inability to take delivery".

"This follows on MP Drilling's cancellation of its jack-up rig, details of which have recently emerged - with 70 cracks found in all three legs during the first test, and more than 180 cracks found in a partial test during the second test," RHB said.

Despite low oil prices and investor flight from oil and gas-related stocks, shares of Ezion Holdings are still seen adding value, OCBC Investment Research said.

"Its earnings have held up quite well compared with other offshore and marine peers in Singapore, due to the more resilient nature of its business. Still, clients have become more demanding in their requirements, and it would not be surprising to us if the group were to seek to diversify from the oil and gas industry," it said. "For this year, we are forecasting $128 million full-year 2015 core net profit."

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'EU stimulus moves fail to impress investors'. Print Edition | Subscribe