Bulls And Bears

Weakness in US drags down S'pore market

Traders jittery as delay in healthcare Bill vote raises doubts over Trump's promised reforms

The local stock market retreated yesterday as investors took their cue from the overnight weakness in the United States.

The benchmark Straits Times Index (STI) pared 3.83 points, or 0.12 per cent, to 3,215.7, while a total of 1.24 billion shares worth $1.06 billion changed hands across the bourse.

This lacklustre performance was in line with the 0.46 per cent drop on Wall Street, as traders fretted over President Donald Trump's ability to deliver on his promises for reform, after a vote on a healthcare Bill was delayed.

"A fresh setback to the Republican agenda in the Senate could weigh on the market as the controversial vote on healthcare reforms was delayed, fuelling speculation that tax cuts and regulatory rollbacks may also take longer than anticipated," noted KGI Securities (Singapore).

The biggest laggards included the Jardine group and Hongkong Land Holdings, which fell 1.6 per cent or 12 US cents to US$7.34.

SIA Engineering sank 1.4 per cent or six cents to $4.11. CIMB Research cut its call on the stock from "hold" to "reduce", noting that there is no pressing need for Singapore Airlines to divest its stake in SIA Engineering as the airline tries to manage its balance sheet.

On the other hand, the banks did well, with gains led by OCBC Bank, which added 0.2 per cent or two cents to $10.75. United Overseas Bank (UOB) climbed 0.04 per cent or one cent to $22.94 and DBS Group Holdings put on 0.05 per cent or one cent to $20.36.

RHB noted that recent data from Credit Bureau Singapore showing stronger first-quarter mortgage applications is "a positive" for banks with a bigger share of housing loans in their business, namely OCBC and UOB.

"We believe these two banks could record stronger housing loan growth in subsequent quarters, which would help drive their respective loan expansion (in this financial year and the next)," it said.

"In addition, the Monetary Authority of Singapore's announcement to allow banks to invest in digital consumer platforms is generally positive for Singapore banks' longer-term growth, as the banks would be able to compete more effectively within this new space."

Meanwhile, a global sell-down in tech stocks on the back of Google's €2.42 billion (S$3.82 billion) fine by the European Union weighed on related counters here. AEM Holdings, for example, slumped 10.8 per cent or 25 cents to $2.07, and Venture Corporation eased 1.4 per cent or 17 cents to $11.93.

Disa was again the most heavily traded stock, surging 16.7 per cent or 0.2 cent to 1.4 cents on 208.1 million shares done.

Elsewhere in Asia, most markets also took a hit. Hong Kong fell 0.61 per cent, Shanghai slid 0.56 per cent and Tokyo was down by 0.47 per cent. Jakarta was still closed for the holidays.

A version of this article appeared in the print edition of The Straits Times on June 29, 2017, with the headline 'Weakness in US drags down S'pore market'. Print Edition | Subscribe