STI down, in line with regional sell-off

Much of the weakness came from the three local banks, which all finished in the red

Markets in Asia beat a retreat yesterday as the positive momentum since the start of the week waned.

Seoul took the heaviest hit with a 1.68 per cent drop as the South Korean government unveiled plans to raise taxes on large corporations, while at home, the Straits Times Index (STI) dipped 5.88 points or 0.18 per cent to 3,342.92.

Overall trade here came up to 1.42 billion shares worth $1.09 billion.

Shanghai dropped 0.37 per cent, Hong Kong sank 0.28 per cent and Tokyo was down by 0.25 per cent,

The sell-off in Asia came on the back of a mixed showing overnight on Wall Street: both the S&P 500 and the Nasdaq finished flat even as the Dow Jones Industrial Average added 0.24 per cent to reach a new record high.

Much of the weakness on the STI came from the local banks, which all finished in the red. OCBC Bank lost 1 per cent or 11 cents to $11.32, DBS Group Holdings pared 0.5 per cent or 11 cents to $22.08, and United Overseas Bank shed 0.04 per cent or one cent to $24.31.

Golden Agri-Resources was one of the biggest laggards, dropping 2.5 per cent or one cent to 39 cents, along with StarHub, down 1.1 per cent or three cents to $2.67.

CIMB said the group's second- quarter results - in which net profit fell 21 per cent to $85.7 million - was in line with expectations, and it foresees weaker earnings in the second half of this year due to higher handset subsidies. The broker kept a "reduce" call on the stock.

Casino operator Genting Singapore rose 1.3 per cent or 1.5 cents to $1.195 in heavy trade after it delivered an impressive turnaround in second-quarter results with a net profit of $143.3 million, compared with a net loss of $10.5 million in the same period last year.

OCBC analyst Eli Lee noted in a report that Genting Singapore's efforts to boost operating margins and keep receivable impairments low - coupled with growing gaming revenues amid rising visitor arrivals - are likely to be the main driving force behind the strong Ebitda (earnings before interest, taxes, depreciation and amortisation) growth that the brokerage projects for the rest of the year.

Outside of the index, BreadTalk Group sank 3.6 per cent or 6.5 cents to $1.73, despite reporting on Wednesday a 61.9 per cent jump in net profit for the second quarter to $2.1 million.

DBS Equity Research kept a "buy" rating on the stock as it sees the group's earnings continuing to deliver growth, driven by a recovery in the food court segment. But RHB downgraded its call to "neutral" given that "the market has priced in BreadTalk's near-term outlook".

Rowsley continued to be the top traded stock of the day, adding 0.9 per cent or 0.1 cent to 11.4 cents on 224.6 million shares done.

Other actives included Addvalue Technologies, flat at 4.9 cents, and Liongold Corp, also unchanged, at 0.1 cent.

A version of this article appeared in the print edition of The Straits Times on August 04, 2017, with the headline 'STI down, in line with regional sell-off'. Print Edition | Subscribe