Bulls And Bears

STI falls on China exports, rate hike signals

Trading volume thinner than usual as most traders closed out positions ahead of holiday

Local shares lost ground after Chinese exports slumped more than expected and a robust American jobs report raised the likelihood of a December rate hike.

The benchmark Straits Times Index (STI) closed down 0.42 per cent or 12.75 points to 2,997.72.

"The next support level is 2,970 but we don't expect that to be broken anytime soon because the US economy is improving after the latest (jobs) report for October went past everyone's expectations," remisier Alvin Yong said. "A December rate hike is factored in already. Now investors are more keen to know the pace of future rate hikes."

Trading volume was thinner than usual because most traders closed out their positions ahead of today's Deepavali holiday.

STI constituents Wilmar International, Noble Group, Genting Singapore and Golden Agri-Resources will release their earnings this week.

"The forecast is for weak to unexciting results, but if they outperform analyst expectations, then we could see a boost in trading activity," Mr Yong said.

The Jumbo Group restaurant chain got off to a roaring start, jumping 36 per cent or nine cents to end its debut trading day at 34 cents, with 77.8 million shares traded, making it the most active counter. Its Catalist initial public offering (IPO) was about eight times subscribed.

"It's no surprise that Jumbo opened above water. The IPO was well marketed, well hyped. It is a household name and its cornerstone investors include a Temasek unit and Osim's chief executive, so this will boost confidence in the company," remisier Chung Chun He said.

Tigerair was another hot stock.

This after Singapore Airlines (SIA) announced on Friday that it has made a $453 million takeover offer for the budget carrier, of which it already owns 55.8 per cent.

SIA, which is offering 41 cents in cash per share, plans to delist and privatise the carrier, and drive closer cooperation and integration with the other airlines within the group.

The stock closed flat at 41 cents, with 76.5 million shares traded. "Investors are cashing out after the takeover (offer) before it gets delisted," Mr Chung said.

IPC Corp jumped 26 per cent or 37 cents to $1.77 after it announced on Friday that it was selling its seven hotels in Japan for about 14.94 billion yen (S$172.2 million).

The board intends to distribute net proceeds from the sale to shareholders by way of a capital reduction exercise.

Meanwhile, Neptune Orient Lines rose one cent to $1.055 with 45 million shares changing hands, following its confirmation on Saturday that it is in preliminary discussions with European shipping liners CMA CGM and AP Moeller-Maersk over a potential acquisition of NOL.

A version of this article appeared in the print edition of The Straits Times on November 10, 2015, with the headline 'STI falls on China exports, rate hike signals'. Print Edition | Subscribe