Bulls And Bears

STI down as oil woes weigh on investors

News that Nigeria, Libya may be restarting oil fields adds to pressure as Brent futures fall

Oil market woes continued to hit investor sentiment and gave already jittery Asian markets little to cheer in another mixed day.

New data pointed to a stronger- than-expected weekly build-up of oil products in the United States although crude oil stockpiles dropped.

Brent futures dropped over 2 per cent as a result, before finding a footing but prices remained stuck below US$47 a barrel.

News that the oil fields in Nigeria and Libya would be restarting added to the pressure, as their output could upset the rebalancing efforts in the market, IG market strategist Bernard Aw said.

With the US Federal Reserve meeting also distracting investors, several key markets fell.

Tokyo pared 1.26 per cent with investors uncertain about the Bank of Japan policy review next week. Kuala Lumpur was down 0.51 per cent and Shanghai was closed for a holiday. Wall Street closed down 0.18 per cent overnight.Singapore's Straits Times Index (STI) shed 3.83 points, or 0.14 per cent, to 2,805.52, and the whole market saw $1.15 billion worth of shares change hands.

ComfortDelGro dropped the most among the 20 STI component stocks that ended in the red yesterday, closing down four cents, or 1.45 per cent, at $2.72. Golden Agri-Resources was off half a cent, or 1.39 per cent, to 35.5 cents.

Things were expectedly choppy in the oil and gas sector. Sembcorp Marine lost 1.5 cent, or 1.19 per cent, to $1.25 and Keppel Corp eased four cents, or 0.77 per cent, to $5.18.

Outside the STI, Marco Polo Marine - which is under scrutiny following news that it is seeking bondholder consent to delay paying $50 million worth of notes - was down 1.2 cent, or 14.29 per cent, to 7.2 cents.

Rickmers Maritime also said yesterday that it cannot repay its bonds due next March. It plunged 0.9 cent, or 12.9 per cent, to 6.1 cents.

"This adds to the list of regional peers who are facing difficulties in meeting their debt obligation amid a tough operating environment," Mr Aw noted.

On the other end of the spectrum, Jardine Cycle & Carriage put on $1.15, or 2.82 per cent, to $42, the best performer among the seven STI stocks that rose yesterday.

Both blue-chip telcos gained, with StarHub adding five cents, or 1.48 per cent, to $3.43, while SingTel rose two cents, or 0.52 per cent, to $3.89.

Perennial Real Estate, which is outside the STI, rose for a second day, adding two cents, or 2.25 per cent, to 91 cents. The property firm recently announced moves to acquire 49.9 per cent of private elderly care operator Shanghai Renshoutang.

"Post-acquisition, this will give (Perennial) access to Shanghai Renshoutang's 11 eldercare facilities with over 2,400 beds and four pharmacies," DBS analysts said in a note this week. "We believe this is a strategic acquisition to expand its healthcare segment via eldercare homes to benefit from an ageing population in China."

A version of this article appeared in the print edition of The Straits Times on September 16, 2016, with the headline 'STI down as oil woes weigh on investors'. Print Edition | Subscribe