Singapore stocks: STI resumes Monday afternoon down 1.3% with bets off for big Fed rate cut

The Singapore Exchange Centre in Shenton Way.
The Singapore Exchange Centre in Shenton Way.PHOTO: ST FILE

SINGAPORE - Singapore and fellow Asian markets felt the sting of last Friday's strong US jobs report which undercut hopes for an aggressive Federal Reserve interest rate cut in July.

Singapore's Straits Times Index (STI) was trading at 3,324.51, down 42.30 points or 1.3 per cent, as at 1.04pm on Monday (July 8).

Shortly after the afternoon session commenced, volume on the Singapore bourse clocked in at 612.7 million securities traded and a total turnover of $511.2 million. Volume and turnover are on track to hit their respective averages over the first five months of the year.

Across the market, decliners trumped advancers 259 to 108. Meanwhile, the benchmark index had 27 of the STI's 30 components trading in the red.

Singtel, down $0.09 or 2.5 per cent lower at $3.47, was the benchmark index's most traded stock with 17.9 million shares changing hands. The telco's shares saw heavier-than-usual trading after DBS Group Research downgraded its recommendation on the counter from "buy" to "hold" but increased the target price from $3.55 to $3.60.

DBS analyst Sachin Mittal said Singtel's recent rally could be losing steam and investors may consider the opportunity to take some profit after the run-up.

Along with the broader market, the local banks returned from the weekend lower. DBS Group Holdings was $0.30 or 1.2 per cent lower at $25.33, OCBC Bank dropped $0.13 or 1.1 per cent to $11.26 and United Overseas Bank traded at $25.98, down $0.28 or 1.1 per cent.

Real estate investment trusts (Reits), which have hogged the limelight on the back of dovish stances from central banks, saw pullbacks from investors on Monday after a strong US non-farm payrolls for June strongly beat market expectations.

Among them, CapitaLand Commerical Trust units fell $0.04 or 1.7 per cent to $2.26 and Ascendas Reit was down $0.06 or 1.9 per cent to $3.12.

EC World Reit faced a heavy sell off on Monday, with its units down $0.03 or 3.9 per cent at $0.755 on 41.9 million shares traded, making it the most active counter on the Singapore bourse.

Unsurprisingly, shares in healthcare player Health Management International (HMI), which resumed trading on Monday morning after an offer by its management and private equity firm EQT to take the company private, shot up $0.06 or 9.1 per cent to trade at $0.72, one cent below EQT's offer price of $0.73.

Maybank Kim Eng has since downgraded its rating for HMI from "buy" to "hold", advising investors of HMI to take the $0.73 offer price as the valuation "appears fair" and is a clean exit, according to its Monday report.

UOB Kay Hian has also advised clients to accept the offer by EQT.

Meanwhile, CGS-CIMB is of the view the offer is "fair but not compelling".

"Given the low trading liquidity and near-term gestation costs from HMI's recent StarMed acquisition, we see this as an exit opportunity for minority shareholders," CGS-CIMB said.