SINGAPORE - A strong lead from Wall Street and China helped fuel a relief rally in Singapore shares, but profit-taking and a weak European opening pared most of its gains after the bourse failed to cross the key 3,000 resistance yesterday.
The benchmark Straits Times Index jumped 1.8 per cent after the market open, but gave back most of its gains in the afternoon, closing up 0.36 per cent, or 10.51 points at 2,955.94.
"Profit taking took over," remisier Alvin Yong said. "Most traders tend not to hold positions over the weekend. They are also watching if the rebound in oil prices is sustainable, as that would indicate a recovery in global growth."
Banking counters led the fall, with DBS down 0.4 per cent or eight cents to $18.01, OCBC fell 0.8 per cent or seven cents to $9.10. Singtel slipped 1.3 per cent or five cents to $3.80.
Also capping positive sentiment is uncertainty over whether the rate lift-off will be delayed further. This after conflicting comments emerged from Federal Reserve officials at a key meeting of central bankers at Jackson Hole. Kansas Fed President Esther George said that interest rates should be normalized in September, one day after New York Fed chief William Dudley said a interest rake hike next month seemed less compelling.
Higher oil prices helped lift oil counters including Keppel Corp, which jumped 1.1 per cent or eight cents to $7.04, and oilfield services firm Ezra Holdings, which gained 7 per cent or 0.8 cent to 12.2 cents, with 378.9 million shares traded.
Ezra, the most actively traded counter yesterday, inked a deal to sell half of its subsea services business, EMAS AMC, to Japanese oil and gas giant Chiyoda.
Chiyoda will pay US$180 million in cash for a 50 per cent stake in the unit, which values EMAS at US$360 million in terms of equity, Ezra said. Including the US$530 million of third-party net debt that EMAS holds and another US$360 million in long-term funding from Ezra, the total deal is valued at US$1.25 billion, it added.
Meanwhile, Noble rose nearly 1 per cent or 0.5 cent to 52 cents, with 103.7 million shares traded, on positive sentiment from news that Japanese conglomerate Mitsubishi will take a 20 per cent stake in Olam International in two deals worth a combined $1.53 billion.
The first will see Mitsubishi buy 332.7 million new shares; in the second, Olam's founding investor, the Kewalram Chanrai Group, agreed to sell an 8 per cent stake to the Japanese company.
After these transactions, Mitsubishi will become Olam's second-largest shareholder with a 20 per cent stake after state-investment firm Temasek, which will have a 51.4 per cent stake.
"That's a God-send for Olam, and it also affirms Temasek's earlier decision to invest in Olam shares and bonds," Mr Yong said.