Bulls And Bears

S'pore shares slump on weak sentiment

Markets retreat on Barcelona terrorist attack, concerns over Trump's economic policies

Singapore shares continued to slide yesterday, as the terror attack in Barcelona dragged down markets across the region.

News of the attack worsened investor sentiment, which had already been soured earlier in the week by what appeared to be division among members of the United States Federal Reserve over the pace of interest rate rises.

Traders are also growing increasingly concerned that US President Donald Trump's plan for tax cuts and infrastructure spending will be derailed by continued controversy in his administration.

"The attack in Spain and the rising doubt that Trump will be able to push through with his economic policies are among a series of unfortunate events creating uncertainty for investors to pull back and capitalise on their gains," said Mr Jonathan Ravelas, the chief market strategist at BDO Unibank, in an interview with AFP.

The Straits Times Index fell 16.89 points or 0.52 per cent yesterday to close at 3,251.99. It shed 0.85 per cent for the week. Shanghai managed to end just 0.01 per cent higher, but other Asian bourses also declined. Hong Kong dropped 1.08 per cent, Tokyo tumbled 1.18 per cent, Seoul slipped 0.14 per cent and Sydney fell 0.56 per cent.

Banking stocks continued to slide at home, with DBS Group down three cents to $20.50, OCBC Bank losing 14 cents to $11 and United Overseas Bank dropping 10 cents to $23.50.

Fears over the banks' exposures to the still-battered offshore and marine sector have returned in recent weeks - particularly after Ezion Holdings called for a trading suspension on Monday, pending discussions with its stakeholders, which include bank lenders and other creditors.

Sembcorp Industries gained two cents to $2.98, after saying onThursday that it had increased its stake in an Indian renewable energy business to 72 per cent.

Its Sembcorp Utilities unit has subscribed to an entire rights issuance by Sembcorp Green Infra to fund the company's growth in the renewable sector in India.

Loyz Energy slipped 0.1 cent to 1.9 cents. It said on Thursday it had returned to the black in the fourth quarter, with net profit of US$11.4 million (S$15.5 million), compared with a loss of US$146,000 for the same period a year earlier.

AEM Holdings fell seven cents to $2.43. CIMB Research reiterated its "add" call on the stock in a note on Thursday, saying the precision engineering company has "plenty of runway to improve profitability".

Analyst William Tng wrote: "Growth opportunities for AEM with its existing customer include the latter's other business segments. AEM could also explore opportunities to supply other types of equipment to its key customer.

"The company is also considering small acquisitions."

A version of this article appeared in the print edition of The Straits Times on August 19, 2017, with the headline 'S'pore shares slump on weak sentiment'. Print Edition | Subscribe