Bulls And Bears

Weaker corporate earnings hit STI

Local shares slip after 4 days of gains, with investors cashing in ahead of weekend

Local shares slipped yesterday after four days of gains on the back of weaker corporate earnings and the eagerness of investors to cash in ahead of the weekend.

The Straits Times Index (STI) went down as much as 0.90 per cent before clawing back to finish at 3,264.30, down 0.65 per cent or 21.42 points. Losers edged out gainers 218 to 169.

Turnover came in at 1.87 billion shares worth $1.42 billion.

Profit-taking was a key activity yesterday, said market watchers.

This was especially so for tech manufacturing plays like Hi-P International, AEM Holdings and UMS Holdings, which have seen their share prices rise steadily throughout the week, said Singapore Exchange market strategist Geoff Howie.

AEM, for example, was the 12th most actively traded stock this week and outpaced the STI in terms of performance. This came after Morgan Stanley raised its deemed interest in the firm above the substantial level.

KGI Research said the gains are likely attributable to institutional buying, which is supported by "improving trade war sentiment, solid third-quarter performances by major semiconductor players and general sentiment improvement of the semiconductor sector".

Hi-P fell 1.91 per cent to $1.54 on trade of 3.4 million, while UMS closed at 84 cents, off 2.33 per cent on turnover of about four million.

AEM declined early but finished unchanged at $1.81, with 8.4 million shares changing hands.

Meanwhile, weaker earning numbers also hit the STI.

Casino operator Genting Singapore fell as much as 3.7 per cent on a poor third quarter reported on Thursday after market hours. It fell 2.08 per cent to 94 cents.

RHB Research Institute is maintaining its "neutral" call and target price of 97 cents for Genting. "While non-gaming businesses performed well on increased tourist arrivals, the gaming segment remained challenging due to a higher levy, rising impairments and competition from Marina Bay Sands and other regional players," the brokerage said.

Early childhood education player MindChamps PreSchool dropped 5.46 per cent to 52 cents after third-quarter earnings dived on higher expenses, despite an increase in turnover from new pre-schools.

EC World Reit lost 0.68 per cent to 73.5 cents. The real estate investment trust, which focuses on China's logistics market, cut its third-quarter distribution per unit to 1.489 cents from 1.57 cents a year ago, blaming a weaker yuan.

A version of this article appeared in the print edition of The Straits Times on November 09, 2019, with the headline 'Weaker corporate earnings hit STI'. Print Edition | Subscribe