Singapore shares continue their slide as contract woes beset offshore, marine firms

An oil rig at SembCorp Marine PPL shipyard.
An oil rig at SembCorp Marine PPL shipyard. ST PHOTO: ALPHONSUS CHERN

SINGAPORE - The jittery Chinese markets showed some signs of calming down but local shares extended their losses, as investors kept their wary eyes on the tumbling energy prices.

Crude oil indicator Brent Futures stayed below US$32 per barrel, triggering further selloff particularly in the offshore and marine-related sectors in Singapore on Tuesday.

As a result, the local benchmark Straits Times Index was down 17.07 points or 0.63 per cent to 2,691.78, with 1.73 billion shares worth $923.1 million changing hands.

Most blue chips ended the day in the red, led by Keppel Corp which pared a sizable 39 cents or 7.04 per cent to $5.15.

Sembcorp Marine also stumbled, shedding 6.5 cents or 4.13 per cent to close at $1.51. The rig builder, which has already been in a contract dispute with Marco Polo Marine since November last year, may face further headwinds amid rumours that major Brazilian client Sete Brasil is set for imminent bankruptcy.

Smaller offshore marine counters were similarly hammered. Ezra Holdings closed down 0.6 cents or 7.06 per cent to 7.9 cents, while Ezion Holdings dropped 0.5 cents or 0.88 per cent to 56.5 cents.

The outlook for oil prices will be mixed in at least the short term, Bank of America Merrill Lynch commodities team said in a recent note as it cut the bank's Brent average forecast for 2016 from US$50 previously to US$46 per barrel.

Meanwhile, banking plays continued to slide, with United Overseas Bank dropping 21 cents or 1.15 per cent to $18.06. OCBC fell six cents or 0.72 per cent to $8.23, while DBS shed one cent or 0.07 per cent.

On the other end of the ledger, Golden Agri-Resources was the top gaining blue chip for the second day, rising 1.5 cents or 4.23 per cent to 37 cents. Talks or weather impact on palm oil production and prices are lifting , as 51.1 million shares were transacted yesterday.

The mixed performance in Singapore came as the region tried to regain their footing after the recent free-fall.

Shanghai managed to eke out a 0.2 per cent gain, with investors encouraged by further stabilisation in the Chinese yuan.

But most other markets remained spooked. Hong Kong closed down 0.89 per cent, Tokyo dropped 2.71 per cent, and Sydney pared 0.17 per cent.