Bulls And Bears

STI bucks regional trend to end slightly lower

Property developers, banks among biggest losers amid concerns over China's economy

Local shares bucked the regional trend yesterday and declined a touch with concerns over the slowing Chinese economy front and centre with investors.

The Straits Times Index (STI) dipped 3.78 points, or 0.12 per cent, to 3,220.56, while indexes in Japan, China, Hong Kong, India, Australia, Malaysia and Indonesia all rose.

This came despite news in the morning that China's economic growth dropped to 6.6 per cent last year - its slowest annual rate since 1990.

Mr Hussein Sayed, chief market strategist at FXTM, said: "The slowdown in China's economy will not impact this sentiment much unless a negative update on US-China trade negotiations is received. The release of Chinese GDP (gross domestic product) figures... was not a surprise and this has been factored into asset prices."

CMC Markets analyst Margaret Yang thinks the STI is challenging a resistance level at around 3,225, following its longest bull strike in more than a year.

About 1.79 billion shares worth $916.71 million changed hands here with gainers outnumbering losers 207 to 183. The STI traded above its last closing for most of the session before tanking abruptly an hour before the closing bell. Sectors that traded lower included construction, commerce, properties and mining/quarrying.

Penny stocks dominated volume trading. Among the most active were JCG Investment, which finished flat at 0.3 cent; Rex International, down 1.24 per cent to eight cents; and Ezion Holdings, which was flat at 5.3 cents.

Other actives included Genting Singapore, up 1.85 per cent to $1.10; and LionGold, flat at 0.1 cent.

Jardine-related companies, property developers and financial institutions featured among the steepest decliners.

Jardine Cycle & Carriage fell 1.6 per cent to $36.46, and Jardine Matheson dipped 0.4 per cent to US$66.58. DBS retreated 0.5 per cent to $25.01, while United Overseas Bank shed 0.4 per cent to $26.43.

City Developments was down 1.6 per cent to $8.84 with UOL off 1.2 per cent to $6.61. This followed weekend news that three condominium projects - the first launches this year - saw over one-third of their released units sold.

The local banks are expected to serve up lukewarm results in the coming earnings season, as higher net interest margins offset a slowdown in yield expansion and loan growth.

A version of this article appeared in the print edition of The Straits Times on January 22, 2019, with the headline 'STI bucks regional trend to end slightly lower'. Print Edition | Subscribe