Singapore shares fall 0.7% as cautious investors await Fed’s next move

SINGAPORE – Shares in Singapore fell in tandem with most regional indexes, with investors

cautiously waiting on the upcoming Federal Reserve meeting

that is taking place over the next two days. Fed officials are widely expected to hold interest rates at their current level.

The Straits Times Index (STI) was 0.7 per cent or 22.64 points lower at 3,240.75 points. Gainers beat losers across the broader market 256 to 253, with 1.1 billion securities worth $888.92 million traded.

Mr Tan De Jun, assistant manager of the research and portfolio management team at FSMOne.com, pointed out that investors could be nervous that the Fed will do something “unexpected”.

Several counters in the oil and gas sector are riding the rising oil price wave amid higher demand and output cut, bucking the decline in the STI. At least three oil exploration and production stocks, Rex International, RH Petrogas and Interra Resources, benefited.

Rex International share price rose 9.6 per cent to 20.5 cents and RH Petrogas climbed 2.4 per cent to 21.5 cents, as the two continued their ascent since bouncing off the August lows. Interra Resources increased by 5.9 per cent to 3.6 cents.

A higher for longer oil price environment would continue to persist, FSMOne.com’s senior research analyst Chloe Nadia Halim believes, especially as the oil and gas sector is underinvested. This is a persistent problem that is difficult to change, with investment on a downward trend since 2014.

“Besides benefiting exploration and production companies, this higher for longer oil prices could result in increased investments in offshore vessels from oil and gas companies, and could benefit players such as Yangzijiang Shipbuilding and Seatrium over the longer term,” she added.

THE BUSINESS TIMES