Bulls And Bears

Hint of US-China trade war spooks market

Number of losers exceeds gainers; anxiety seen over Keppel results as well

The hint of a possible trade war between China and the United States took its toll on shares in Singapore as the benchmark Straits Times Index fell 36.6 points to close at 3,572.6.

The number of losers - 296 - outstripped the 179 counters that saw their prices rise.

US Commerce Secretary Wilbur Ross had spooked stock markets by telling the World Economic Forum in Davos that United States authorities were investigating whether China had infringed intellectual property and studying if they should take action against it.

Other than the pronouncements coming out of Davos, investors in Singapore were also anxious about the colour of Keppel Corp's books. The diversified marine conglomerate released its fourth-quarter results after the close of the market on yesterday.

Keppel reported a net profit of $217 million last year, down 72 per cent from $784 million in 2016. This was due mainly to the one-off fine of US$422 million (S$552 million) slapped on Keppel Offshore & Marine (KOM) for bribes to officials in Brazil. Once the related legal, accounting and forensic costs were factored in, it had to shoulder a burden of $619 million.

With the penalty and related costs, Keppel would have turned in a net profit $836 million for FY 2017, 7 per cent up from $784 million a year ago.

It closed five cents down at $8.58.

Hong Kong-based Noble Group rallied as much as 21 per cent to 32 cents. It was trading around 30.5 cents, up 4 cents, when it sought a trading halt at 3.26pm. Debtwire reported the beleaguered commodities group had reached an agreement with its creditors to restructure about US$3.5 billion in debt, paving the way for an investor to take a controlling stake in the firm.

CapitaLand Commercial Trust (CCT) closed one cent down at $1.90 despite higher distributable income of $75.0 million in Q4 2017, versus $70.8 million a year ago.

Genting Singapore slipped three cents to $1.36, with more than 50 million shares traded.

UOB Kay Hian technical analyst noted: "The stock could continue to trade in the direction of its prevailing trend... Mild retracements... are opportunities to re-establish long positions. Ideally, the stock price should continue to trade well above its short term moving average. For now, we expect the high of Nov 5 2013 to be retested. Approximate timeframe on average: Two weeks."

He said its institutional research has a fundamental "hold" and target price of S$1.30 for the stock.

A version of this article appeared in the print edition of The Straits Times on January 26, 2018, with the headline 'Hint of US-China trade war spooks market '. Print Edition | Subscribe