Bulls And Bears

STI sheds 0.13% amid muted Asian markets

Weak sentiment prevails with US Fed still hawkish on how rates may move at later date

Singapore stocks remained weak yesterday as investors assessed the possibility of another interest rate hike in the United States this year.

The benchmark Straits Times Index (STI) eased 4.25 points, or 0.13 per cent, to 3,213.82, with a total of 1.39 million shares worth $1.04 million traded across the bourse.

Other markets in Asia were subdued as well: Shanghai fell 0.24 per cent; Hong Kong dipped 0.06 per cent; and Sydney dropped 0.94 per cent. Tokyo held up with a gain of 0.18 per cent, after the Bank of Japan left its monetary policy unchanged.

The downbeat sentiment in the region came as the US Federal Reserve maintained a hawkish stance on how rates will move at the end of the year, while setting, as expected, October as the start for the reduction of its balance sheet.

KGI Securities (Singapore) trading strategist Nicholas Teo said in a note that the outcome of the Fed meeting may signal "a pivotal point in setting new direction for capital flows ahead".

"The consequences of a tighter monetary flow are similar to the effects of an outgoing tide, and stocks, like bonds, will have to take notice," said Mr Teo.

"Furthermore, with the lack of market volatility recorded so far, this could even mean that the eventual pent-up move may be bigger and wilder than before."

Some of the biggest losers on the STI yesterday were Jardine Matheson Holdings, which dropped 2.4 per cent or US$1.59 to US$63.65, and Yangzijiang Shipbuilding (Holdings), down 1.8 per cent or 2.5 cents to $1.395.

The local banks were in play, with United Overseas Bank advancing 0.6 per cent or 14 cents to $23.26, and DBS Group Holdings up 0.2 per cent or four cents to $20.52. OCBC Bank climbed 0.6 per cent or seven cents to $11.08.

Elsewhere, Tat Hong Holdings jumped to as high as 41.5 cents, before the company requested for a trading halt in the afternoon. The stock last traded at 40.5 cents, 5.2 per cent or two cents up on the previous day's close, with 3.3 million shares changing hands.

The crane specialist told the Singapore Exchange in a filing it has been approached by certain parties in relation to a potential transaction, and that it has appointed Rippledot Capital Advisers as its financial adviser in connection with such approaches. The firm added that the discussions are ongoing and "there is no certainty or assurance whatsoever that any transaction will arise from these discussions".

Cityneon Holdings jumped 5.6 per cent or six cents to $1.14. A DBS Equity Research report noted that the company's recent acquisition of the full global rights to Jurassic World Exhibition has placed it on a "stronger and firmer growth path", keeping its "buy" call on the stock.

The day's top traded counter was again Rowsley, which rose 3.8 per cent or half a cent to 13.6 cents on 175.8 million shares done.

A version of this article appeared in the print edition of The Straits Times on September 22, 2017, with the headline 'STI sheds 0.13% amid muted Asian markets'. Subscribe