Bulls and bears

STI falls again with more bleak days tipped

Buoyant US job data and moves to stabilise yuan not enough to lift investor sentiment

Local shares continued their slide yesterday despite a good United States job report and moves to stabilise the yuan.

The sour mood sent the benchmark Straits Times Index (STI) down 42.38 points or 1.54 per cent to 2,708.85, its lowest since it hit 2,698.9 in June 2012.

The days ahead are looking similarly bleak, remisier Desmond Leong warned. "It all depends on what happens in China, but we are not seeing the data to expect the markets to bottom out yet," he said.

"Keep in mind that the first leg of rebound from a crash is usually a technical rebound - and we haven't even had that first leg yet."

It was much the same across the region, especially in China, the epicentre of last week's turmoil.

Shanghai fell 5.33 per cent and Shenzhen dropped 6.6 per cent. The CSI 300 index of blue chips on both exchanges has lost 14.4 per cent since the start of the year.

Even a buoyant US job report on Friday and news yesterday that China had kept the yuan stable after it hit a low against the greenback last week could not lift sentiment.

Hong Kong was down 2.76 per cent, Sydney lost 1.17 per cent and Kuala Lumpur dropped 1.21 per cent. Tokyo was closed for a holiday.

Banks here took a hit. DBS pared 34 cents or 2.16 per cent to $15.38, OCBC dropped 11 cents or 1.31 per cent to $8.29 and United Overseas Bank closed down 14 cents or 0.76 per cent to $18.27.

The banks will be regarded with some caution as global economic uncertainties pile up. Slowing business loans growth and the potential deterioration of credit quality are questions on investors' minds.

Keppel Corp extended its loss, down 26 cents or 4.48 per cent to a near six-year low of $5.54.

Sembcorp Marine was down 5.5 cents or 3.37 per cent to $1.57, while Ezra Holdings fell 0.7 cent or 7.61 per cent to 8.5 cents. The offshore and marine sector is being belted by rig order woes and weak energy prices. Ezra issued a loss warning last week for its first-quarter results due on Thursday.

Noble Group remained in its downward spiral after news last week that it had lost its investment grade rating with Standard & Poor's. It dropped 0.5 cent or 1.47 per cent to 33.5 cents. In an apparent bid to shore up the price, company founder and chairman Richard Elman bought 10 million shares last Friday for $3.19 million.

Only Golden Agri-Resources gained among STI component stocks, up 0.5 cent or 1.43 per cent to 35.5 cents, with 36.22 million shares transacted. The palm oil firm recently received a buy call with a 42 cent target price from Deutsche Bank.

There were more bright spots outside the STI. Tigerair put on 0.5 cent or 1.11 per cent to 45.5 cents after Singapore Airlines announced that its 45 cent buyout offer was unconditional.

Singapore Post was also up, rising 0.5 cent or 0.33 per cent to $1.53. CIMB analyst Jessalynn Chen noted that the recent resignation of chief executive Wolfgang Baier should have limited impact as the key management remained in place.

A version of this article appeared in the print edition of The Straits Times on January 12, 2016, with the headline 'STI falls again with more bleak days tipped'. Print Edition | Subscribe