Bulls And Bears

Local bourse dragged down by banks

DBS leads laggards after it warns provisions for oil and gas portfolio could be higher

Singapore stocks tumbled further into the red yesterday, erasing gains from earlier in the week.

The benchmark Straits Times Index (STI) slid 16.4 points, or 0.49 per cent, to 3,326.52 - though it was almost flat for the week, easing just 4.23 points or 0.13 per cent. Turnover across the bourse was 1.09 billion shares worth $1.22 billion.

Most of the action here centred on the local banks, in particular DBS Group Holdings, which announced an 8 per cent rise in second-quarter earnings to $1.14 billion before the markets opened.

But the counter sank 2.7 per cent or 59 cents to $21.49 as the biggest laggard among the blue chips, after the bank warned provisions for its oil and gas portfolio could be higher than previously guided.

"We forecast (DBS') non-performing loan ratio to rise to 1.6 per cent by end-2017, from the second quarter's 1.5 per cent," said RHB in a report, adding that it is sticking to its "neutral" recommendation for the stock, given the uncertainty.

OCBC Bank slid 1 per cent or 11 cents to $11.21 and United Overseas Bank dropped 1.2 per cent or 28 cents to $24.03.

On the other hand, CapitaLand jumped 3.2 per cent or 12 cents to $3.86. The group said that its wholly-owned serviced residence business unit, The Ascott, is investing $170.3 million - through its serviced residence global fund with Qatar Investment Authority - in the serviced residence component of the Funan integrated development.

Hongkong Land Holdings rose 2.8 per cent or 21 US cents to US$7.80, after posting a 147 per cent surge in net profit for the first half of this year to US$3.13 billion (S$4.3 billion).

Singapore Airlines pared 0.4 per cent or four cents to $10.53 on news that it is asking its cabin crew to take no-pay leave to address a temporary manpower surplus.

Rowsley was again the day's top-traded counter. The stock lost 1.8 per cent or 0.2 cent to 11.2 cents on 83.6 million shares done.

Consumer electronics retailer TT International, which last traded at 1.4 cents on July 28, requested for a trading suspension yesterday morning. It is sorting out its funding options amid creditors' demands.

Elsewhere in Asia, markets were broadly mixed ahead of the United States' non-farm payrolls.

Tokyo dropped 0.38 per cent and Shanghai fell 0.33 per cent, while Hong Kong inched up 0.12 per cent.

Wall Street put on just 0.04 per cent overnight.

Of the US job report, CMC Markets Singapore market analyst Margaret Yang said: "A higher figure indicates more employment and thus inflationary pressure, which will increase the likelihood of a December rate hike. A strong employment number also suggests faster economic growth and spending in the future, (and) therefore is likely to send the US dollar higher.

"A lower figure, however, will likely do the reverse."

A version of this article appeared in the print edition of The Straits Times on August 05, 2017, with the headline 'Local bourse dragged down by banks'. Print Edition | Subscribe