Bulls And Bears

Local shares dip on news of Ezra's woes

Ezra Holdings' subsea construction vessel Lewek Constellation.
Ezra Holdings' subsea construction vessel Lewek Constellation. PHOTO: EZRA HOLDINGS

Amid weak sentiment, analyst notes worries over banks' bad loans, possible bankruptcies

Local shares ended slightly lower yesterday as the bankruptcy filing of Ezra Holdings weighed on investor sentiment and sparked a bout of profit taking.

The Straits Times Index dipped 0.12 per cent or 3.68 points to 3,165.70 with investors taking profit on Yangzijiang Shipbuilding, which shed 2.6 per cent or three cents to $1.125.

Other blue-chip losers included ST Engineering, down 1.9 per cent or seven cents to $3.68, and Sembcorp Industries, off 0.9 per cent or three cents to $3.21.

Ezra's trading halt was converted to a suspension yesterday after it filed for Chapter 11 bankruptcy protection in the US, following the bankruptcy filing of its associate Emas Chiyoda Subsea last month.

"Ezra's bankruptcy is going to trigger concerns over the banks' bad loans, and also raises questions over whether there are more bankruptcies looming in the sector," said CMC Markets analyst Margaret Yang.

Ezra's shipyard-operating unit Triyards Holdings asked for a trading halt yesterday, pending an announcement. Its stock last traded at 28.5 cents. Triyards has guaranteed part of a joint bank facility with Ezra, and could pay up to US$30 million (S$42 million) if Ezra defaults.

Their exposure to the troubled firms saw DBS ease 13 cents or 0.7 per cent to $19.01, while OCBC Bank shed three cents, or 0.3 per cent at $9.63.

Another offshore marine counter also appeared to be in trouble. Nam Cheong sank 30.6 per cent or 1.5 cents to 3.4 cents, with 37.9 million shares traded after auditors on Friday highlighted a material uncertainty about the company being a going concern.

Meanwhile, shares of M1's shareholders - Keppel T&T and Singapore Press Holdings - closed higher yesterday after they and Axiata Group began a strategic review of their holdings in the telco. This may not result in a transaction.

Keppel T&T rose 4.5 cents or 2.6 per cent at $1.75, while SPH added two cents or 0.6 per cent at $3.55. M1 ended down 0.9 per cent, or two cents, to $2.17.

The most actively traded counter yesterday was traditional coffee-shop operator Kimly, which staged a robust debut on the Catalist board, closing at 44 cents, or 76 per cent above its initial public offering price of 25 cents. Some 108.5 million shares changed hands.

"We are very pleased that a home-grown company is able to successfully raise $43.5 million, well supported by investors such as Heliconia Capital Management," Mr Chew Sutat, the Singapore Exchange's head of equities and fixed income, said.

Other actively traded counters included Cacola Furniture International, which plunged 50 per cent or 0.1 cent to 0.1 cent, with 73.8 million shares changing hands. This came after its appeal for extra time to exit the SGX's watch list was rejected.

A version of this article appeared in the print edition of The Straits Times on March 21, 2017, with the headline 'Local shares dip on news of Ezra's woes'. Print Edition | Subscribe