Bulls And Bears

STI slips as traders cash in on early gains

But DBS and UOB buck downtrend to chalk up pluses after overnight rally on Wall Street

A bout of profit-taking ahead of the Chinese New Year holiday sent Singapore shares lower after earlier gains on the back of a strong day on Wall Street.

Better-than-expected economic data and policies from President Donald Trump that are tipped to boost the oil and gas and manufacturing sectors fuelled the rise in US stocks. The Straits Times Index took the hint and jumped as much as 0.6 per cent in the first hour of trading yesterday.

But the urge to cash in took over and the index closed down 0.07 per cent or 2.01 points to 3,039.94.

The path downwards was led by StarHub, which sank 4.5 per cent or 14 cents to $2.96 in sympathy with M1, after the telco's full-year earnings came in below expectations.

OCBC Investment Research maintained a hold call on M1, which shed 5.5 per cent or 12 cents to $2.05. The broker sees a muted outlook for M1 in light of new entrant TPG Telecom ramping up its presence.

Other counters that weighed down the bourse included Singapore Exchange, which lost nearly 2 per cent or 15 cents to $7.40, and City Developments, off 1.3 per cent or 13 cents to $10.14.

Keppel Corp fell 1.4 per cent or nine cents to $6.27, ahead of the release of fourth-quarter results today.

But some banks continued to defy gravity. DBS Group surged to an 18-month high of $19.03 before profit-taking took it down to $18.85, still up 19 cents or 1.02 per cent.

UOB gained 0.14 per cent or three cents to $20.99 after a broker upgraded its call to buy from neutral. UOB KayHian cited expected higher net interest margins and a less severe deterioration in asset quality.

"UOB may play catch-up after the recent share price under-performance. Since end-September, DBS' share price has risen 22 per cent while OCBC climbed 8 per cent. UOB was up 12 per cent. We see potential for the bank to catch up in share price upside given its potential gains from a Singapore Interbank Offered Rate (Sibor) rise," the broking house said.

UOL was flat at $6.45 after news that it had acquired a freehold site at 45, Amber Road. Maybank Kim Eng said the "price is reasonable, considering its good location".

Oceanus Group plunged 28.6 per cent or 0.2 cent to 0.5 cent, with 29.2 million shares traded, after it announced new plans to restructure debt with three major creditors totalling about $81.44 million.

The seafood company was responding to a Singapore Exchange query on its unusual trade volume.

Other hotly traded counters included LionGold, which plunged 50 per cent or 0.1 cent to 0.1 cent, with 123.4 million shares traded, and Magnus Energy, flat at 0.1 cent, with 84.2 million shares traded.

Artivision Tech jumped 6.7 per cent or 0.1 cent to 1.6 cents, with nearly 82 million shares changing hands. Nico Steel shed 7.7 per cent or 0.1 cent to 1.2 cents on trade of nearly 47 million shares.

A version of this article appeared in the print edition of The Straits Times on January 26, 2017, with the headline 'STI slips as traders cash in on early gains'. Print Edition | Subscribe