Telcos, oil and gas concerns weigh on STI

Benchmark dips 0.23%; analyst says market 'now consolidating' after a good run

Profit-taking in the three telcos and lingering concerns over the oil and gas sector following the Ezra bankruptcy filing sent local shares into negative territory yesterday.

The Straits Times Index closed down 0.23 per cent or 7.13 points to 3,158.57, hit by Singtel, which shed 1.5 per cent or six cents to $3.94, and StarHub, off 0.7 per cent or two cents to $2.89.

Fellow telco M1 fell 0.9 per cent or two cents to $2.15, despite OCBC Investment Research upgrading the firm to a hold following news that its three substantial shareholders are conducting a strategic review of their stakes.

Other blue-chip falls also sent the market down: City Developments (CDL) lost 0.9 per cent or nine cents to $10.54; Wilmar International fell 1.1 per cent or four cents to $3.55; and Sembcorp Industries slid 0.6 per cent or two cents to $3.19.

"The market has had a good run and is now consolidating, with support seen at 3,100," remisier Desmond Leong said.

Other than CDL, property counters including CapitaLand, Wing Tai and Yanlord Land continued to see bargain-hunting interest after the Government announced tweaks to its cooling measures earlier this month.

CapitaLand rose 0.3 per cent or one cent to $3.73, Wing Tai edged up 0.5 per cent or one cent to $1.905 while Yanlord gained 1.1 per cent or two cents to $1.80.

Ezra's fallout continued to be felt by the three banks, which fell on concerns over their non-performing loans. DBS Group edged down 0.1 per cent or one cent to $19, UOB dipped 0.3 per cent or six cents to $21.80 and OCBC Bank slipped 0.1 per cent or one cent to $9.62.

Nam Cheong fell again after its independent auditors cast doubts on the shipbuilder's ability as a going concern. That sent the stock plunging 20.6 per cent or 0.7 cent to 2.7 cents, with 42.2 million shares traded.

Oil and gas counters also fell ahead of the release of data on United States oil inventories last night. Analysts expect a rise in stockpiles to record highs. But it wasn't all bad news for the sector. Keppel Corp edged up two cents or 0.3 per cent to $6.83, boosted by news that a Norwegian firm will take over the contracts and remaining payments for a US$1.1 billion (S$1.5 billion) order of five rigs from Transocean. Analysts say this will enable Keppel to improve its cash flow.

Australia-based construction firm Civmec rose three cents or 4.6 per cent to 68 cents after it entered into a memorandum of understanding with ASC Shipbuilding to jointly bid for the building of 12 offshore patrol vessels for the Royal Australian Navy.

Newly listed coffee shop operator Kimly gained 4.5 per cent or two cents to 46 cents, with 38.6 million shares traded yesterday.

Other heavily traded counters included Disa, which shed 3.6 per cent or 0.1 cent to 2.7 cents, with 43.6 million shares traded.

A version of this article appeared in the print edition of The Straits Times on March 22, 2017, with the headline 'Telcos, oil and gas concerns weigh on STI'. Print Edition | Subscribe