Singapore shares retreated yesterday as oil sank into bear market territory with prices slumping to nine-month lows as rising supplies threaten to derail efforts by Opec to support the market.
The Straits Times Index slipped 0.89 per cent or 28.65 points to 3,201.77, weighed down by Yangzijiang Shipbuilding, Jardine Matheson Holdings, City Developments, ComfortDelGro Corp and Sembcorp Industries.
Yangzijiang shed 2 per cent or 2.5 cents to $1.195; JMH lost 2 per cent or US$1.31 to US$62.79; ComfortDelGro slipped 1.6 per cent or four cents to $2.41, with 26.8 million shares traded.
Investors are sidelined ahead of an announcement from United Industrial Corp (UIC), UOL Group and Haw Par Corp, which asked to halt the trading of their stocks before the market opened yesterday.
All three companies, which are owned by the Wee family, led by patriarch Wee Cho Yaw, have been the subject of speculation of potential privatisation for the past month.
Property counters took a breather yesterday ahead of the announcement, with analysts saying they believe the sector is undervalued and due for a more positive rerating.
CDL dropped 1.9 per cent or 21 cents to $10.65; Ho Bee Land dipped 0.4 per cent or one cent to $2.40; Far East Orchard shed 0.6 per cent or one cent to $1.59.
It was also a fairly gloomy picture for local oil and gas plays.
Keppel Corp lost 1.6 per cent or 10 cents to $6.19; SembIndustries fell 1.6 per cent or five cents to $3.04; Sembcorp Marine shed 0.3 per cent or 0.5 cent to $1.615.
This sell-off came after US oil prices sank to US$43.23 a barrel, down more than 20 per cent from levels at the start of the year on signs of rising output from Nigeria and Libya, the two Opec members exempt from having to cut output.
Cosco Shipping International, which jumped 22 per cent or 5.5 cents to 30.5 cents, got a trading query from the Singapore Exchange on unusual price and volume movement in its stock. Some 17.8 million shares changed hands.
Nam Cheong tumbled 22.2 per cent or 0.6 cent to 2.1 cents after OCBC Bank sued a unit of the Malaysian shipbuilder over a US$10 million (S$14 million)loan.
Meanwhile, news of China's A shares being included in US index publisher MSCI's emerging markets index is perceived as a positive development but the impact may likely be felt in the longer term.
Mr Sunil Hiranandani, director and regional head of Belt Road Initiative, HSBC Singapore, believed MSCI's move will benefit Singapore-based fund managers and institutional investors.
"China's commitment to opening up its capital markets will create opportunities for investors, allowing them access to China's large cap companies in high growth sectors such as consumer, technology and industrials," he said.