Bulls and bears

Investors hold back amid Brexit jitters

Market debutant Frasers Logistics and Industrial Trust, penny stocks draw interest

Brexit jitters continued to hit Singapore shares, forcing investors to sit it out until the outcome of tomorrow's referendum is known. PHOTO: REUTERS

Brexit jitters continued to hit Singapore shares, forcing investors to sit it out until the outcome of tomorrow's referendum is known.

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

About 835.4 million shares worth $730.3 million changed hands.

Market watchers say the British referendum is too close to call.

"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. Still, we expect the STI to hold up at around the 2,700 level," according to DBS Group Research.

"A financial contagion is not feared, and investors will be looking at central banks to... stem any potential panic."

A "Remain" vote should see the STI rebound towards 2,900, with banks and rigbuilders that have lost ground in the past two weeks leading the charge, it added.


Companies with earnings exposure to the British pound, such as City Developments, ComfortDelgro and SembCorp Industries, will be more sensitive.

Defensive and yield stocks, including telco M1, ST Engineering and supermarket chain Sheng Siong, could outperform if Britain votes to leave, DBS said.

Meanwhile, Frasers Logistics and Industrial Trust made its market debut at 90.5 cents yesterday and closed at 91 cents, above its 89 cents-a-share initial public offering (IPO) price.

Dealers attributed the stock's good debut in a jittery market to its attractive yield and strong institutional investor interest. More than 140.2 million shares were 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.

Penny stocks were again the most actively traded, with Ezra Holdings falling 1.3 per cent or 0.1 cent 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 cent to 2.6 cents on a turnover of 42.9 million shares.

ISR Capital jumped 12.2 per cent or 1.1 cents to 10.1 cents, with 19.8 million shares changing hands.

OCBC Investment Research has a hold rating on Genting Singapore, saying it is "positive" on its stake in Resorts World Jeju.

The casino operator's share price dipped 0.7 per cent or 0.5 cent to 72.5 cents yesterday.

"Genting Singapore has subscribed for an additional 15 million of new ordinary shares in Landing Jeju Development for $176.7 million," it said.

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A version of this article appeared in the print edition of The Straits Times on June 22, 2016, with the headline Investors hold back amid Brexit jitters. Subscribe