Bulls And Bears

STI down on concern over Paris attacks

But analysts say no need to panic, and terror hits unlikely to have major economic impact

Concern over last Friday's Paris terror attacks undermined investor sentiment yesterday and sent regional shares falling, although market experts see no reason to panic.

The dour mood left the benchmark Straits Times Index (STI) down 9.95 points or 0.34 per cent at 2,915.73 after a slow day that saw only 1.19 billion shares worth $855.7 million transacted.

Investors elsewhere also took their money off the table. Hong Kong pared 1.72 per cent while Tokyo was down 1.04 per cent, on the same day official data showed Japan has fallen back into recession.

Shanghai managed to gain 0.73 per cent with a late-hour surge.

European markets opened low last night amid the tense mood but managed to regain their footing quickly, with the French benchmark CAC 40 down only 0.09 per cent in the early hours while London's FTSE 100 index even managed to rise 0.14 per cent in the morning.

The markets may continue to see some short-term reaction over the incidents in Paris but Barclays senior economist Leong Wai Ho said there is no cause for alarm.

"There may be some knee-jerk reactions. For instance, people may short airlines, expecting the tightening of border restrictions. But the markets (yesterday) were relatively calm and I don't expect a major impact," he told The Straits Times.

Bank of Singapore chief economist Richard Jerram agreed, saying: "Judging from past incidents, the economic impact (of terror attacks) tends to be low and very short."

Against this backdrop, Noble Group was the top active counter with over 74.7 million shares changing hands. It is also the top active blue chip in turnover for the first 10 months this year, according to Singapore Exchange data yesterday.

The commodity giant closed down one cent or 2.25 per cent to 43.5 cents, following an 11 per cent fall last Friday as the company announced that third-quarter earnings had plunged 84 per cent.

Genting Singapore, which delivered a disappointing 62 per cent drop in third-quarter net profit last week, lost the most among the blue chips yesterday, declining 2.5 cents or 3.21 per cent to 75.5 cents.

"While we expect a recovery in earnings next year... there remains significant earnings risk given headwinds from regional currency volatility and slowing Asian economies," DBS analyst Mervin Song noted.

Among blue chip gainers, Sats rose the most, putting on eight cents or 2.05 per cent to $3.98. Wilmar International went up five cents or 1.71 per cent to $2.98.

Outside the STI, film firm Spackman Entertainment Group continued to march north, up 1.1 cents or 9.02 per cent to 13.3 cents with 74.1 million shares changing hands.

Spackman is up about 189 per cent since the start of October, clearly a hot target for small-cap play.

The firm yesterday said its film The Priests has broken Korea's November box office record.

A version of this article appeared in the print edition of The Straits Times on November 17, 2015, with the headline 'STI down on concern over Paris attacks'. Print Edition | Subscribe