Bulls And Bears

Weak export data weighs down local bourse

STI falls for a sixth straight session as July export plunge fuels fears about the economy

Singapore shares fell for a sixth straight session yesterday, weighed down by deepening gloom over the local economy after weaker-than-expected export data.

The Straits Times Index (STI) lost 0.22 per cent or 6.37 points to 2,836.98.

A steep 10.6 per cent year-on- year plunge in Singapore's July non-oil domestic exports fuelled fears of a weakening economy and dampened market sentiment.

DBS senior economist Irvin Seah said the poor trade data and a downward revision in second-quarter gross domestic product figures added to growing risks of a contraction ahead. "For those maintaining a sanguine view on the near-term outlook on the economy, this should be a wake-up call," he added.

The bourse was also hit by poor showings by ComfortDelGro, which fell 2.1 per cent or six cents to $2.84, and CapitaLand, down 1.3 per cent or four cents to $3.09.

Maybank Kim Eng, which maintained a hold call on ComfortDelGro, said its second- quarter numbers missed forecasts due to unfavourable currency translation effects from overseas bus and taxi revenue.

It cut the taxi operator's full-year earnings per share by 10 per cent to take into account a weaker pound.

Meanwhile, Singtel dipped 0.2 per cent or one cent to $4.20 following news of a deal with Temasek Holdings to buy a 21 per cent stake in Thai telecommunications conglomerate Intouch Holdings. Singtel is also picking up a 7.39 per cent stake in Bharti Telecom.

"We think this is not a bad deal - it does not stress Singtel's balance sheet, and at the same time is earnings and dividends accretive," Nomura Global Markets Research said. "We note that this deal is consistent with Singtel management's view of increasing its stake at the associate level at the right opportunity and, given this, a further stake increase cannot be ruled out," it said.

Commodity counters Noble Group and Golden Agri-Resources were among the most actively traded. Noble slipped 2.8 per cent or 0.4 cent to 13.8 cents, with 91.6 million shares traded, as the stock extended losses following the recent ratings downgrade by Moody's.

Golden Agri fell 2.7 per cent or one cent to 36 cents on trade of 36.8 million shares, while KLW Holdings shed 8.3 per cent or 0.1 cent to 1.1 cents, with 33.1 million shares changing hands.

Ezion Holdings fell for a third day, sliding one cent or 3.7 per cent to 26 cents on trade of 26.4 million shares.

"The stock is trading below the rights issue price of 29 cents and I'm not surprised that it is easier to short the stock," a trader said.

Tiong Woon Construction eased 2.1 per cent or 0.5 cent to 23.5 cents, after it said it expects to report a loss for the 2016 financial year, due largely to provisions for doubtful debts.

A version of this article appeared in the print edition of The Straits Times on August 19, 2016, with the headline 'Weak export data weighs down local bourse'. Print Edition | Subscribe