Slow start to trading week as investors stay on sidelines, STI closes 6 points lower

SINGAPORE - Singapore shares kicked off the trading week on a lacklustre note as investors stay sidelined ahead of the US Federal Open Markets Committee meeting next week.

The benchmark Straits Times Index closed 0.2 per cent or 6.11 points lower to 3,024.50, weighed down by a 1.3 per cent drop in Singtel. The telco shed five cents to $3.89 on a bout of profit-taking.

"The STI is likely to be in consolidation pattern between 3,000 and 3,050 for the rest of the week, as investors watch for the timing of the rate hike and whether the Fed will continue talking about market volatility," IG market strategist Bernard Aw said.

Investors are also eyeing the European Central Bank (ECB) Governing Council meeting on Thursday for signs of further quantitative easing. If introduced, this could be a boost for equities markets, he said.

Oil and gas penny plays were among the most actively traded following a rebound in oil prices. Loyz Energy skyrocketed 63 per cent or 2.9 cents to 7.5 cents, with nearly 124 million shares traded; Ezra gained 1.6 per cent or 0.2 cent to 13 cents, with 64.7 million shares traded. Charisma Energy surged 20 per cent or 0.3 cent to 1.8 cents, with nearly 50 million shares traded, while Rex International gained nearly 8 per cent or 1.2 cents to 16.3 cents, with 42.4 million shares traded.

As the third quarter earnings season kicks off, traders are watching for results from the Singapore Exchange, to be released Wednesday, and Keppel Corp, to be released Thursday. For SGX's first quarter fiscal 2016 earnings, they are watching for signs of improvement in its securities revenues.

"We are watching to see if Keppel has new business coming in. But the market expects no significant improvement because of still weak oil environment," remisier Chung Chun He said.

Shares of Keppel DC Reit were flat at $1.045 despite posting a better-than-expected net distributable income of $14.5 million last week, which was 2.2 per cent higher than its initial public offer forecast.

With close to 70 per cent of net property income derived from co-location leases, the data centre Reit is "poised to ride on rising global usage of data and demand for data centres. Earnings are further supported by its master leased properties which have average annual escalations of 2-4 per cent," DBS Group Research said.

Meanwhile, Noble Group, which continued to show improvement in access to credit, was flat at 50.5 cents, with 51.6 million shares traded. The commodity trader announced yesterday it completed a US$1.1 billion revolving credit facility. That was raised from an initial US$450 million, reflecting lenders' support, Noble said.