Bulls and bears

Tense countdown to US jobs data report

Traders play it safe amid worries of Fed rate hike soon; bourse stays down for fifth day

The Singapore market completed a week-long losing streak yesterday as traders kept to the sidelines on worries that a United States interest rate hike could come soon.

The benchmark Straits Times Index (STI) slid 12.55 points, or 0.45 per cent, to 2,803.92 - down for the fifth straight day, and 53.73 points or 1.88 per cent lower for the week.

Total trade across the bourse was an improvement over previous days, with 1.13 billion shares worth $1.02 billion changing hands.

This comes as a closely watched US jobs report is released early today Singapore time.

"The market's focus has now turned towards US non-farm payrolls, which is set to be a key determinant in the Fed's rate hike decision in September," said CMC Markets Singapore market analyst Margaret Yang.

"If the actual data turns out to be a big miss, enthusiasm on the September rate hike will dampen."

All three local telcos were in play yesterday, after three other companies - MyRepublic, airYotta and TPG Telecom - submitted bids for the licence to be Singapore's fourth mobile phone operator.

Singtel fell 10 cents or 2.5 per cent to $3.87 in heavy trade, and was the biggest drag on the index. M1 was the worst hit, slumping 15 cents or 5.6 per cent to $2.51, followed by StarHub, which sank 16 cents or 4.4 per cent to $3.47.

An OCBC Investment Research report has maintained a "hold" call on all three telcos, with Singtel as its preferred pick.

"In the event the Infocomm Development Authority of Singapore does award the licence to a fourth operator, our view remains that Singtel will be the least impacted... on the back of a diversified revenue base and an established enterprise business," it said.

"Impact on StarHub will be partly mitigated by its enterprise business and TV-bundling options, while M1 will likely be most impacted, given the lack of such business segments."

Rig-builder Sembcorp Marine tumbled 3.5 cents or 2.8 per cent to $1.23 following news that it will be dropped from the index from Sept 19 and replaced by Jardine Matheson Holdings. The latter, in turn, rose 65 US cents or 1.1 per cent to US$60.65.

Keppel Corporation, whose rig-building arm on Thursday signed a heads of agreement with two partners to define the anchor projects to be pursued by a tripartite joint-venture company Zvezda-Keppel Design and Engineering Center, was flat at $5.19.

OUE Hospitality Trust was the day's top active, slipping half a cent or 0.7 per cent to 67.5 cents on 117.6 million shares done.

Other markets in Asia saw little movement as investors, too, counted down to the release of the US jobs data. Hong Kong grew 0.45 per cent, Shanghai added 0.13 per cent and Tokyo eased 0.01 per cent. Wall Street inched up 0.1 per cent overnight, lifted in part by higher crude prices.

A version of this article appeared in the print edition of The Straits Times on September 03, 2016, with the headline 'Tense countdown to US jobs data report'. Print Edition | Subscribe