Lacklustre Q1, global economic woes weigh on Singapore markets, STI down 37 points

Pedestrians on an escalator passing an electronic screen and ticker board that indicates stock figures at the Singapore Exchange (SGX) headquarters.
Pedestrians on an escalator passing an electronic screen and ticker board that indicates stock figures at the Singapore Exchange (SGX) headquarters. ST PHOTO: CHEW SENG KIM

SINGAPORE - Investors seem to have taken the old adage "sell in May, go away" to heart, as Singapore shares extended losses for a 10th straight session.

A weak Wall Street lead, global economic woes and mostly lacklustre first quarter local corporate earnings sent the key Straits Times Index down 1.34 per cent or 37.01 points to 2,730.80. For the week, the STI was down 3.8 per cent.

Ever since the Bank of Japan spooked markets with its surprise decision to stand pat on policy at its meeting last week, the local market lost its impetus to move up further, traders say.

"Coupled with a lack of good news from the global front, it's hard for the market to move up further," remisier Alvin Yong said. "Key support for the market is now seen at the 2,680 level."

Weighing down the market were banking counters and HongKong Land. OCBC slipped 1.3 per cent or 11 cents to S$8.33; UOB dipped 1.7 per cent or 31 cents to S$17.79 and DBS Group fell 0.9 per cent or 14 cents to S$14.87. HongKong Land shed 2.6 per cent or 16 cents to S$6.04.

But some brokerages remain bullish on the banking sector. UOB KayHian maintained an overweight call on the sector, saying that DBS' results exceeded expectations, while OCBC and UOB's results were in line with expectations.

"Our top pick is DBS, followed by OCBC," it said. "Investors should be relieved that the deterioration in asset quality was mild. Growth could be strengthened in the second half of the year, due to a pick-up in loan growth."

Banks reported single-digit growth in net interest income despite a contraction in trade loans. "OCBC's and UOB's fees from wealth management declined 15.5 per cent year on year, and 26.1 per cent year on year respectively. The decline was most severe at UOB at -26.1 per cent year on year. DBS was the exception with wealth management fees growing 5.4 per cent year on year, boosted by its bancassurance partnership with ManuLife," the brokerage said.

Meanwhile, Singapore-listed logistics firm CWT got queried by the Singapore Exchange for a second time in two months for "unusual price and volume movements" in its stock. CWT shares rose 5.9 per cent or 12 cents to S$2.14, with 5.2 million shares traded.

This after reports that Chinese conglomerate HNA Group is in advanced discussions with the controlling shareholders of CWT - C&P Holdings - to buy its stake in the firm - which would trigger an offer for the entire company valued at about US$1 billion (S$1.37 billion).

Weaker oil prices took a toll on oil and commodity counters, which were among the most actively traded. Noble Group fell 4.7 per cent or 2 cents to 40.5 cents, with 57.2 million shares traded; Ezra Holdings dipped 4.2 per cent or 0.4 cents to 9.1 cents with 40.5 million shares traded. Golden Agri-Resources sank 2.6 per cent or 1 cent to 37 cents, with 33.5 million shares traded.