Bank, property and tech sectors hit by poor sentiment

Local banks fell over concerns that new loans growth might ease in line with the possible slowdown in property transactions in the coming quarters.
Local banks fell over concerns that new loans growth might ease in line with the possible slowdown in property transactions in the coming quarters.PHOTO: ST FILE

Prices fall to lows seen last year and in 2016 as traders mull over trade war, global growth issues

Local banks and technology heavyweights including Venture Corp have slipped back to their 2017 levels, while some counters of property developers have fallen to levels last seen in 2016.

This happened as a confluence of factors, including trade war and global growth concerns, as well as local property cooling measures, continued to weigh on investor sentiment.

Local banks fell over concerns that new loans growth might ease in line with the possible slowdown in property transactions in the coming quarters.

DBS lost 39 cents to $23.71 and UOB shed 7 cents to $24.95 respectively - levels last seen in November last year. OCBC, meanwhile, dipped four cents to $10.60, a price that it has not fallen below since June last year.

Investors are eyeing UOB's third-quarter results, which are to be released before trading starts today.

"With local interest rates rising, that will likely mean net interest margins of banks are likely to increase," CMC market analyst Margaret Yang said.

The July 6 property cooling measures, coupled with the latest development controls, are not expected to impact the third-quarter earnings of local developers, Ms Yang added.

 
 
 

However, poor sentiment has pummelled key developers, including City Developments, which fell as much as 1.6 per cent to $7.97 at the opening before paring losses to finish 1.2 per cent lower at $8. CDL last traded below the $8 levels in March 2016.

Chinese developer Yanlord Land lost 2.5 per cent or three cents to $1.19, a level not seen since August 2016.

Andrew Chow, head of research at UOB KayHian, attributed weakness in property stocks in part to concerns over "possible provisioning of some developers' land bank in the fourth quarter".

"Because of the cooling measures, land valuers may look to cut the valuation of land bank of some developers," he said.

Technology solutions provider Venture Corp sank 1.7 per cent or 27 cents to $15.75, a level last seen in September 2017. Contract manufacturer H-iP International clawed back ground from a low of 75 cents - a level last seen in May 2017 to close a smidgeon higher at 81 cents.

Even casino operator Genting Singapore took a beating, slipping 2.2 per cent or two cents to 89 cents - a level last seen in January 2017.

Mr Chow noted that trade war-related disruption to the supply chain will likely be more apparent from the fourth-quarter.

Maybank Kim Eng analyst Chua Hak Bin believes the trade war may be attracting more firms to set up operations in Asean to circumvent the tariffs.

A recent American Chamber of Commerce survey showed that 18.5 per cent of some 420 US firms in China indicated plans to relocate their manufacturing facilities to Asean to avoid tariffs.

"Sectors such as consumer products, industrial, technology & telecommunications hardware, automotive and chemicals have indicated interest in South-east Asia," Mr Chua said.

A version of this article appeared in the print edition of The Straits Times on October 26, 2018, with the headline 'Bank, property and tech sectors hit by poor sentiment'. Print Edition | Subscribe