Bulls And Bears

STI slips on oil price blues, weak Wall Street

Singapore shares decline for third straight session; penny plays most actively traded

An uninspiring performance on Wall Street coupled with anaemic oil prices kept Singapore shares in negative territory for a third straight session.

The lack of direction left the Straits Times Index down 22.58 points or 0.76 per cent to 2,959.01.

A weaker greenback helped support oil prices in Asia trade but expectations of an increase in United States stockpiles are likely to weigh on prices again.

US benchmark West Texas Intermediate was at US$42.93 a barrel, while Brent was at US$45.82 a barrel. Oil-related plays continue to suffer. Rex International slipped 6.4 per cent or 0.9 cent to 13.2 cents. Ezra fell 1.7 per cent or 0.2 cent to 11.6 cents and Ezion Holdings shed nearly 3 per cent or two cents to 65.5 cents.

Maybank Kim Eng, which has a buy call on Ezion, said: "Although headline rates and contracts are intact, Ezion cites increasing pressure and operational challenges... It is looking at ways to manage and to diversify these risks."

Rig-builder Sembcorp Marine was down 1.8 per cent or four cents to $2.24. Conglomerate Keppel Corp dipped 1.6 per cent or 11 cents to $6.90.

Singtel was unchanged at $3.87. The telco reported almost flat second-quarter net profit with the impact from adverse currency movements offsetting the growing use of mobile data across its markets.

Palm oil giant Wilmar International slipped 2.6 per cent or eight cents to $2.97 after announcing a 35 per cent drop in third-quarter net profit on higher losses from its investment securities and higher foreign exchange losses. Revenue fell 7.6 per cent to US$10.6 billion (S$15 billion).

DBS Group Research noted that palm oil prices are weighed down by a worsening supply glut and Indonesian biodiesel demand.

Penny plays were the most actively traded. Medical supplies group QT Vascular continued to slide on news of bigger net losses for the third quarter after it considered possible damages after losing a patent suit. QT shed 9 per cent or 1.2 cents to 12 cents, with 43.5 million shares traded.

Mercator Lines (Singapore) asked for a suspension of trading yesterday. The shipping company said it has applied to the High Court for a scheme of arrangement while its creditor wants the firm to be placed under judicial management and interim judicial management.

A weaker greenback helped support oil prices in Asia trade but expectations of an increase in United States stockpiles are likely to weigh on prices again.

A version of this article appeared in the print edition of The Straits Times on November 13, 2015, with the headline 'STI slips on oil price blues, weak Wall Street'. Print Edition | Subscribe