STI closes 7 points higher over profit taking

SINGAPORE - Singapore shares closed a smidgeon higher on Wednesday after giving back some of their earlier gains following a bout of profit-taking in China.

The Straits Times Index ended the day 6.67 points or 0.22 per cent higher at 3,025.70.

The Shanghai Composite Index retreated from an eight-week high, losing 3.1 per cent yesterday. Hong Kong was closed for a holiday.

Shanghai has rebounded 8.8 per cent so far this month, heading for the steepest monthly advance in six months, amid speculation the government will further loosen monetary policy and announce more overhauls of state-owned enterprises to shore up the economy.

"Despite a lack of stimulus news from China, investors still expect China to cut interest rates and lower banks' required reserve ratios at least one more time by the end of the year," remisier Alvin Yong said.

S-chips hogged the most actively traded list, with China Fishery adding 5.3 per cent or 0.5 cents to 10 cents, with 107.3 million shares traded; China Sky Chemical soared 19.2 per cent or one cent to 6.2 cents, with 105.6 million shares traded; Hu An Cable jumped 16.7 per cent or 0.2 cents to 1.4 cents, with 93.4 million shares traded.

China Sports rose 7.1 per cent or 0.1 cent to 1.5 cents, with 50.8 million shares traded; China Environment fell 3.7 per cent or 0.4 cents to 10.3 cents, with 37 million shares traded; China Bearing surged 19.2 per cent or 0.5 cents to 3.1 cents, with 33.9 million shares traded.

Meanwhile, Wilmar International, which was queried by the Singapore Exchange over "unusual price movements" after jumping 8.9 per cent on Tuesday, said yesterday it was "not aware of any information ... that might explain the trading."

But the company said one of its directors, a nominee of Archer Daniels Midland Co, a substantial shareholder of Wilmar, that ADM has purchased Wilmar shares in the market, "reflecting about 22 per cent of total sale volume on Tuesday."

Shares of Noble Group dipped nearly 1 per cent or 0.5 cents to 51 cents, after Moody's Investors Service noted that the company may lose its investment-grade credit rating, if its liquidity position doesn't improve in the next one to two quarters. Some 49.4 million Noble shares traded yesterday.

While Noble's move to increase secured lending will not immediately effect the credit rating, it could also be downgraded if its leverage continues to rise, Moody's said.

The commodity trader has lifted its senior secured revolving trade credit facility to US$1.1 billion from US$450 million. Moody's rates Noble at Baa3, the lowest investment grade, while Standard & Poor's rated the company BBB-, also the lowest investment grade.