Bulls And Bears

S'pore shares retreat ahead of US job report

Sentiment subdued over upcoming job data from US and worries over Trump's policies

Singapore equities retreated a little further yesterday despite an optimistic start to the trading day.

The benchmark Straits Times Index (STI) slid 2.14 points, or 0.07 per cent, to 3,041.94 - marking a 22.91-point, or 0.75 per cent, decline for the week. Turnover across the bourse was 2.76 billion shares worth $1.12 billion.

Sentiment was subdued here - as in most other parts of Asia - ahead of a key job report in the United States, while traders continued to worry over US President Donald Trump's isolationist policies.

Data from China showing factory activity in the world's second-largest economy grew at a slower pace last month did little to help as well.

Shanghai lost 0.6 per cent as trading resumed after the long Chinese New Year holiday, while Tokyo was flat, inching up 0.02 per cent. Hong Kong eased 0.24 per cent.

Wall Street pared 0.03 per cent overnight, although the greenback rebounded.

Of the 30 STI constituents, 16 finished stronger, 10 fell and four were flat. All three Singapore banks continued to chalk up losses, led by United Overseas Bank, which dropped 25 cents, or 1.2 per cent, to $20.38.

DBS Group Holdings slid 12 cents, or 0.6 per cent, to $18.66 and OCBC Bank shaved off three cents, or 0.3 per cent, to $9.42.

CIMB kept its "underweight" rating on the banks, noting that offshore services firm Ezra Holdings' debt problems could lead to its liquidation in a worst-case scenario, and in turn affect the banks negatively.

"Should the entire Ezra group go into liquidation, the banks will have to recognise their exposures as non-performing loans and make adequate provisions for the unrecoverable amounts," it said in a report.

Ezra warned yesterday it may need to write down US$170 million (S$240 million) over its investment in Emas Chiyoda Subsea, and will be faced with "a going-concern issue" if restructuring options are not completed in a timely manner. The counter last traded at 4.8 cents before its trading halt on Wednesday.

Other oil and gas-related plays also dominated much of the action, such as Ezion Holdings, which sank 1.5 cents, or 3.7 per cent, to 39.5 cents.

AusGroup fell 0.1 cent, or 2.2 per cent, to 4.4 cents, despite a gain of about A$1.3 million (S$1.4 million) from sale of its assets and equipment in Singapore for US$3 million.

Elsewhere, Sabana Reit jumped four cents, or 10.4 per cent, to 42.5 cents, after the trust's sponsor and manager said they will undertake a strategic review of the Reit. This follows a recent campaign by unitholders to fire the trust manager over the trust's poor performance.

China Star Food Group rose 1.2 cents, or 6.8 per cent, to 18.8 cents, after news it will expand its products to 419 Walmart stores in China.

The day's top active was Oceanus Group, which surged 0.1 cent, or 12.5 per cent, to 0.9 cent on 334.2 million shares done.

A version of this article appeared in the print edition of The Straits Times on February 04, 2017, with the headline 'S'pore shares retreat ahead of US job report'. Print Edition | Subscribe