Bulls And Bears

STI slips as investors stay on sidelines

Penny stocks most active counters as traders await comments from US Fed, ECB chiefs

Singapore shares ended slightly weaker yesterday as investors' appetite for riskier assets waned on lower crude oil prices. The Straits Times Index (STI) closed 0.08 per cent or 2.22 points lower to 2,858.01.

The index was weighed down by Hongkong Land, which slipped 1.3 per cent or nine US cents to US$7.05; DBS Group Holdings, which dipped 0.5 per cent or eight cents to $15.22, and Jardine Matheson Holdings, which shed 0.4 per cent or 25 US cents to US$60.25. The Singapore Exchange (SGX) fell 1.1 per cent or eight cents to $7.39.

Oil prices tumbled after Iran rejected Saudi Arabia's offer to trim oil output in exchange for a reduction by Iran. "Into the third day of the Opec meeting, there seems to be no new breakthrough. We may have to look to the next meeting in November," a dealer said.

Traders are also watching for comments from European Central Bank president Mario Draghi and Federal Reserve chair Janet Yellen. Mr Draghi faced questions from German lawmakers yesterday about the central bank's policy, while Dr Yellen testifies before the United States House Financial Services Committee on financial regulation.

Pennies were again the most actively traded counters.

Noble Group gained 7.1 per cent or one cent to 15.1 cents on short covering and buying from foreign houses. Some 257.2 million shares changed hands.

ISDN Holdings was queried by SGX on unusual price and volume movement after its shares jumped 13.8 per cent or 2.6 cents to 21.5 cents. Ezra Holdings rose 1.7 per cent or 0.1 cents to 5.9 cents, with 109.7 million shares traded.

Australian miner Alliance Mineral Assets leapt 8.2 per cent or 0.8 cents to 10.5 cents, with 58.9 million shares traded after the company - which extracts tantalite, a metal used in the electronics industry - said it has "received an e-mail confirmation to commence introduction talks with Temasek Holdings though a Singapore statutory body". But it added that no formal talks have occurred yet.

Airport handling agent Sats edged down 0.4 per cent or two cents to $4.95 after a brokerage issued a hold call, citing signs of slower traffic growth at Changi Airport.

"Sats' ongoing plans to diversify out of Singapore and away from reliance on the aviation industry will take time to bear fruit, and is unlikely to see material results in the near term," OCBC Investment Research said.

CapitaLand eked out a 0.6 per cent or two cents gain to $3.19 after OCBC issued a buy call on the developer after it acquired a 0.5 ha prime site in Ho Chi Minh City for US$51.9 million. The brokerage said the move would "deepen the group's exposure to the growing Vietnamese market and is its third acquisition in the country since June 2015. In particular, the serviced residences component will generate incremental recurring income".

A version of this article appeared in the print edition of The Straits Times on September 29, 2016, with the headline 'STI slips as investors stay on sidelines'. Print Edition | Subscribe