Singapore shares lost ground yesterday despite a hopeful start inspired by higher oil prices.
The benchmark Straits Times Index slipped 3.56 points, or 0.13 per cent, to 2,793.99. Some 1.73 billion shares worth $1.26 billion changed hands across the bourse.
Traders are waiting to see non-oil domestic export data due out today, with further weakness expected for Singapore shipments.
Sembcorp Marine rose 2.5 cents or 1.9 per cent to $1.35 after announcing on Tuesday that it has entered into a deal to sell its 30 per cent stake in Cosco Shipyard Group.
OCBC Investment Research analyst Low Pei Han said the divestment will mean Cosco Shipyard's poor performance becomes less of a drag on SembMarine's results.
But she maintained a "sell" call on the stock with a fair value estimate of $1.13, citing the potential impact of SembMarine's removal from the MSCI Singapore index in the latest review, as most funds are benchmarked to MSCI indices.
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Offshore services firm Mermaid Maritime shot up 1.5 cents or 12.6 per cent to 13.4 cents in heavy trade, likely on market rumours of a privatisation bid.
DBS Group Research in a report maintained its "hold" call on the stock, noting that the company remains a candidate for privatisation by majority shareholder Thoresen Thai and its promoter group, which together control 77 per cent of outstanding shares. It added that Mermaid is a "relatively safer" stock compared with those facing distress as it continues to generate positive cash flows and has low net gearing with no bonds outstanding.
Food and beverage group BreadTalk Group drew a trading query from the Singapore Exchange in the afternoon after jumping more than 6 per cent. It rose five cents or 4.8 per cent to close at $1.09.
BreadTalk later said it has been in discussion with several third parties on "the formation of a joint venture to be a franchisee and operator of an existing business in a new territory". It said the talks were not expected to have a material impact in the financial year ending Dec 31.
Former entertainment group LifeBrandz requested a trading halt on its shares before the market opened yesterday, "pending (the) release of announcements". The group's auditors last month flagged concern over its ability to continue as a going concern.
Commodity trader Noble Group was the top active, sliding 0.3 cent or 1.6 per cent to 18 cents on 133.9 million shares done.
KGI Securities (Singapore) trading strategist Nicholas Teo noted that global bond markets earned a brief respite overnight after being pummelled over the last few days.
"Bonds are signalling (interest) rates will be hiked in December... Almost one year ago, bond markets were similarly as jittery. Yields rose in anticipation of the Fed's first hike in seven years, which subsequently happened in December."
