Bulls And Bears

STI resumes downtrend, led by Keppel Corp

Keppel down 2.4% on news its unit will pay US$422m in fines to settle bribery probe

With the market moving into one of the quietest trading weeks of the year, there were still some stocks of note in yesterday's trading on the Singapore Exchange (SGX).

Led by conglomerate Keppel Corporation, Singapore's Straits Times Index resumed its recent downtrend, closing down 7.55 points, or 0.22 per cent, to 3,378.16.

About 558.3 million shares worth $522.4 million changed hands. Well over a third of the value traded was taken up by Keppel, Singtel and DBS Bank.

Keppel dived to as low as $7.09 before rising to finish at $7.29, down 2.4 per cent or 18 cents.

Its stock price had been expected to fall after subsidiary Keppel Offshore & Marine said last Saturday that it would pay US$422 million (S$567 million) in fines as part of a global resolution for a graft probe across three jurisdictions in Singapore, Brazil and the United States.

The fine amounted to about 31 Singapore cents per share. Keppel said it has the financial resources to pay the fine and it will make a provision accordingly in the current year.

Rival Sembcorp Marine, which is also exposed to Brazil, fell seven cents, or 3.6 per cent, to $1.87. The group also said yesterday it has sold its West Rigel rig for a slight loss.

Looking ahead, share prices of both firms will inevitably be linked to medium-term expectations for the price of oil. In the short term, markets are still bullish as inventories continue to be drawn down and rig counts are somewhat flat.

CIMB Research said in a Christmas note that it is keeping an "overweight" call on the offshore and marine sector, with the return of non-drilling orders as a key catalyst.

Elsewhere in the world, some analysts are notably trimming their sales forecasts of Apple's new iPhone X.

On the SGX, Hi-P International, a contract manufacturer that got half its 2016 business from Apple, nevertheless rose four cents to finish at $1.88. The company is one of SGX's top performers of the year, up about four times from the beginning of 2017.

Maybank Kim Eng Research had initiated coverage of the firm on Dec 20 with a "buy" call and a target price of $2.11, citing a focus by the company on blue-chip companies like Apple, Keurig and Colgate.

In the small-cap space, recently listed textbooks and consumer products reseller Y Ventures Group hit an intraday high of 29.5 cents before closing unchanged at 27.5 cents. Price action occurred on relatively high volumes last Friday and yesterday.

A version of this article appeared in the print edition of The Straits Times on December 27, 2017, with the headline 'STI resumes downtrend, led by Keppel Corp'. Print Edition | Subscribe