BullsAndBears

N. Korea concerns continue to weigh on STI

Even Trump's surprise deal with Congress fails to help bourse sustain earlier gains

Singapore shares closed on a weaker note after giving back earlier gains as ongoing concerns over the North Korean nuclear threat outweighed a surprise deal by United States lawmakers that averted fears of a government shutdown.

The key Straits Times Index closed 0.14 per cent or 4.41 points lower at 3,228.06, dragged down by Singtel, OCBC Bank, Jardine Cycle & Carriage, Yangzijiang Shipbuilding and Thai Beverage (ThaiBev).

Singtel shed two cents to $3.67, OCBC dipped three cents to $10.93 and Jardine Cycle & Carriage lost 74 cents to $38.85. Yangzijiang fell three cents to $1.405 while ThaiBev dropped 0.5 cent to 91.5 cents.

Most bourses across Asia started higher, but many were unable to sustain the advance as bids stayed thin. Investors were awaiting the monetary policy statement from the European Central Bank (ECB), released last night, to see if there were any changes to the stimulus programme.

ECB president Mario Draghi is expected to lay the groundwork regarding the central bank's stimulus programme, but most investors feel he will hold off until next month to make any major announcements.

US President Donald Trump forged a surprising deal with Democrats in Congress on Wednesday to extend the debt limit and provide government funding until Dec 15.

But despite a positive lead from Wall Street overnight, Asian markets could not hold on to gains.

"September-October remains vulnerable to autumn panics, and it seems people are very concerned about North Korea. The final 30 minutes of weakness seen in US markets made the day's advance rather unconvincing," noted one dealer.

Among the most actively traded counters were Rowsley, which gained 0.2 cent to 11.5 cents, with 143.3 million shares done. NetLink NBN Trust rose two cents to 84.5 cents on 50.6 million shares traded.

CapitaMall Trust dipped two cents to $2.07, while Vashion surged 0.1 cent to 0.2 cent on a turnover of 20.5 million shares.

mm2 Asia's shares rose 1.5 cents to 49.5 cents on news that it had inked a deal with two Chinese media firms to invest US$25 million (S$34 million) to co-produce five films as well as online films over three years.

Mermaid Maritime gained 0.2 cent to 12.4 cents after announcing it had won US$12 million in subsea contracts in South-east Asia and the Middle East.

Wing Tai Holdings dipped one cent to $2.11 despite a buy call for the firm's low gearing and potential to buy more land bank. Like many undervalued local property stocks, it is trading at a 39 per cent discount to the firm's revalued net asset value.

"We believe Wing Tai will further deepen its footprint in Singapore, Malaysia (post-privatisation completion) and Australia. It plans to develop over 600 homes on the 99-year leasehold residential site in Serangoon North Avenue 1, with a gross foot area of 462,561 sq ft," said UOB Kay Hian.

A version of this article appeared in the print edition of The Straits Times on September 08, 2017, with the headline 'N. Korea concerns continue to weigh on STI'. Print Edition | Subscribe