Bulls And Bears

Stocks fall as investors fret over US-China talks

US jobs report also weighs on Asian markets, with STI falling 30.3 points

Shares across Asia retreated yesterday ahead of the monthly American jobs report and some anxiety over the outcome of the Sino-US trade talks being held in Beijing.

Besides the jobs report, investors were keeping a close watch on the Beijing showdown.

As the two days of negotiations neared an end with few signs of progress, China state-run news agency Xinhua reported that the US delegation in Beijing asked China to decrease its trade surplus by at least US$200 billion (S$266 billion) by the end of 2020.

The uncertainty sent Hong Kong down 0.9 per cent, Shanghai 0.3 per cent and Sydney 0.6 per cent.

It was much the same story here, with the Straits Times Index (STI) closing at 3,545.38 points, down 0.85 per cent, or 30.3 points.

About two billion shares worth $1.2 billion changed hands with 158 gainers to 258 losers.

Offshore and marine group Ezion Holdings, which resumed trading last month after its stock was suspended last August, ended at 10.9 cents, down 1.1 cents, or 9 per cent. It was among the most actively traded with more than 137 million shares changing hands.

A recent KGI Securities report kept its "sell" call on the stock. It said a key metric to watch would be its cashflow generation over the next three years.

"Ezion's balance sheet remains highly leveraged and may require another rights/placement to strengthen it," the analyst warned.

United Overseas Bank (UOB) lost 51 cents, or 1.72 per cent, to $29.07.

UOB is seen as a laggard among the local banks, trading at cheaper valuations compared with its peers.

"The dividend yield of more than 4 per cent should lend support to its share price," said Maybank Kim Eng analyst Ng Li Hiang.

Sembcorp Industries ended two cents down at $3.04.

DBS analyst Ho Pei Hwa said the marine conglomerate offers a unique value proposition as a proxy to ride the cyclical offshore and marine upturn, and is supported by a defensive utilities business.

"We believe in the long-term growth prospects of Sembcorp Industries' utilities arm, which has expanded its global footprint and recently made forays into key emerging markets," she noted.

Elsewhere, Vard Holdings - the takeover target of Italy's Fincantieri O&G - has sought an extension of its trading halt by two more days until the end of Monday, pending Singapore Exchange's review of its delisting extraordinary general meeting.

A version of this article appeared in the print edition of The Straits Times on May 05, 2018, with the headline 'Stocks fall as investors fret over US-China talks'. Print Edition | Subscribe