Bulls And Bears

STI falls on weaker earnings, risk aversion

Benchmark index dragged down by results of large caps, bucks Asia recovery

Singapore shares fell yesterday, bucking the recovery in most Asian markets, following weaker earnings results and risk aversion ahead of the long weekend.

The Straits Times Index (STI) began the day in the red and eventually closed down 0.49 per cent, or 15.75 points, at 3,168.94. Decliners and advancers were almost evenly matched, with 204 closing lower versus 194 higher.

Turnover on the bourse was slightly over 970 million shares worth $1.14 billion.

"Investors fled from the equity market ahead of the four-day holiday break," said CMC Markets analyst Margaret Yang. "Uncertainties over trades and weaker growth prospects shown in recent earnings results reined in risk-taking activities."

The benchmark index was also dragged down by the disappointing earnings results of some large caps.

Property giant CapitaLand fell 0.58 per cent, or 2 cents, to $3.45 after recording a 4.2 per cent drop in net profit to $579.8 million for its second quarter.

Singtel also ended lower, shedding 0.91 per cent, or 3 cents, to $3.26, after first-quarter net profit hit a 16-year low. The counter was one of the most actively traded stocks of the session, with nearly 19 million shares changing hands.

Another index constituent, Yangzijiang Shipbuilding, faced a sell-down, falling 20 per cent, or 26 cents, to $1.04, with some 83.7 million shares traded at 11.30am.

The share price plunge prompted the shipbuilding and offshore firm to call for a trading halt, pending an announcement.

On the flip side, companies that posted positive earnings results saw their counters gain too.

Vehicle-inspection group Vicom on Wednesday posted second-quarter net profit of $6.6 million, up 4.9 per cent from the same period a year earlier, lifted by improved business volumes. It provided a fillip to Vicom's shares, which gained 1.42 per cent, or 10 cents, to $7.15.

Shares of beverage maker Fraser & Neave went up 1.8 per cent, or 3 cents, to $1.70, after the company posted a net profit of $54.8 million in the third quarter, up 9 per cent from the same period a year earlier.

Regionally, most Asian bourses finished back in the black after being roiled by trade war volatility earlier in the week. In Japan, the Nikkei 225 rose 0.37 per cent to close at 20,593.35, while Australia's S&P/ASX 200 gained 0.75 per cent to close at 6,568.10. Hong Kong's Hang Seng Index rose 0.5 per cent to close at 26,120.77.

A version of this article appeared in the print edition of The Straits Times on August 09, 2019, with the headline 'STI falls on weaker earnings, risk aversion'. Print Edition | Subscribe