Bulls And Bears

Singapore stocks get the Monday blues

Weak showing from banks, especially with DBS losing 18 cents a share, depress STI

The Monday blues kicked in yesterday with shares ending slightly lower on the back of depressing earnings news from DBS Bank.

The gloomy mood sent the benchmark Straits Times Index (STI) down 0.46 points or 0.01 per cent to 3,381.85, mainly dragged down by banking stocks.

There were 2.7 billion shares traded valued at $1.3 billion, with losers outscoring the gainers by 239 to 209.

DBS and OCBC Bank chalked up losses of a combined 6.9 index point: OCBC lost nine cents to $11.72; UOB shed one to $24.76.

The real pain was felt at DBS, which took a beating, losing 18 cents to $22.79. The bank reported that its earnings fell 25 per cent for the third quarter from a year earlier to $802 million as it almost doubled its specific provisions for bad debts.

IG analyst Jingyi Pan noted that DBS has been troubled by the "lingering bad debt from the oil and gas sector" though it seemed to have attempted to move past the episode. "While this may bode well for future growth trajectory, this lift in provision could take a short-term toll on share prices and local indices."

The STI did enjoy some cheer with electronics provider Venture Corporation soaring $2.69 or almost 14 per cent to $21.99 after a stellar set of third-quarter results on Friday that blew past analyst expectations.

Cosco Shipping International's cash buyout offer for Cogent Holdings pushed its stock up 5.5 cents yesterday to 35.5 cents on trade of 38 million units, making it among the most active counters.

There was also heavy trading of real estate and consumer business investment firm Yoma Strategic Holdings, which fell four cents to 54.5 cents.

The firm had said on the weekend that it had closed a placement exercise to raise about $82.2 million.

Energy stocks were in play earlier in the day amid the anti-corruption crackdown in Saudi Arabia.

The blues also spread across the region. Tokyo's Nikkei and Hong Kong's Hang Seng ended the day flat while Seoul's Kospi closed lower. Australian and New Zealand both ended the day marginally lower.

Mr Philip Wee, strategist at DBS Group Research, said New York Federal President William Dudley is reportedly expected to announce his plan to bring forward his retirement.

"Dudley's term ends in January 2019 but will step down in spring or summer next year ," Mr Wee noted.

"If so, Dudley will be the third ally of Fed Chair Janet Yellen to step down in the Fed Board of Governors... With Trump nominating Fed governor Jerome Powell to the Fed chair next year, Dr Yellen may also resign as governor after her term expires in February 2018. The above Fed governor resignations have been viewed as one common voice against Mr Trump's push to deregulate Wall Street."

A version of this article appeared in the print edition of The Straits Times on November 07, 2017, with the headline 'Singapore stocks get the Monday blues'. Print Edition | Subscribe