Weak oil prices add to market jitters

STI expected to hit new full-year low on concern about US rate hike, China slowdown

Asian markets suffered another tepid day as weak oil prices continued to spook investors, while funds were pulled to avoid any potential impact from the expected US Federal Reserve interest rate hike announcement next week.

The global crude benchmark Brent futures edged up slightly to US$40.22 a barrel yesterday evening, but is still just a fraction above its lowest levels in six years.

The oil jitters hit most key regional markets, with Shanghai down 0.49 per cent and Hong Kong paring 0.45 per cent. Tokyo shed 1.32 per cent and Sydney 0.84 per cent.

"Add to that the rate hike concerns and the Chinese economic woes, and you may see the STI (Straits Times Index) going down further to possibly hit another full-year low," remisier Chung Chun He told The Straits Times.

The STI dropped for the third day, sliding 12.73 points, or 0.44 per cent, to 2,848.46, with 959.2 million shares traded, pointing to another lukewarm session.

STI's 12-month low was 2,787.94 on Sept 29 - about 70 points south of the current level. Investors should not test whether this level will hold, Mr Chung warned.

"My advice would be to hold your cash and wait at least until after next week to see where the markets go after the Federal Reserve meeting."

As many as 21 STI constituent counters ended lower, with Ascendas Real Estate Investment Trust losing the most among the blue chips. It sank 10 cents, or 4.2 per cent, to $2.28, after announcing the price of its 90 million new private placement units: $2.223 each.

The fund-raising exercise will finance Ascendas Reit's move to acquire One@Changi business park for $420 million.

Sembcorp Marine, shrouded in contract woes, pared seven cents, or 3.88 per cent, to $1.735.

Both CapitaLand counters also fell. CapitaLand Mall Trust shed 2.5 cents, or 1.3 per cent, to $1.895, and CapitaLand Limited closed four cents, or 1.24 per cent, lower at $3.18.

Hutchison Port Holdings Trust gained the most among STI stocks, adding 1.5 US cents, or 2.83 per cent, to 54.5 US cents. Telcos Singtel and StarHub rose, with Singtel up four cents, or 1.05 per cent, at $3.85, while StarHub put on four cents, or 1.12 per cent, to end at $3.61.

Outside the STI, China Environment remained the market's most active stock with 67.33 million shares changing hands. It closed up 0.2 cent, or 2.33 per cent, at 8.8 cents.

The green tech firm yesterday announced the resignation of independent director Wu Yu Liang, a member of its audit committee.

SingPost announced after market close that chief executive Wolfgang Baier had resigned. He is credited with boosting its e-commerce unit, which contributed 29 per cent of revenue in the three months to Sept 30, when group net profit rose 38.5 per cent year on year to $53.4 million.

SingPost dropped two cents, or 1.13 per cent, to $1.755 yesterday.

A version of this article appeared in the print edition of The Straits Times on December 11, 2015, with the headline 'Weak oil prices add to market jitters'. Print Edition | Subscribe