Bourses fall over oil woes, Fed rate hike
ASIAN markets suffered another tepid day as weak oil prices continued to spook investors, while funds were pulled to avoid any potential impact from the expected United States Federal Reserve interest rate hike announcement next week.
The global crude benchmark Brent futures edged up slightly to US$40.22 a barrel yesterday evening, but sits still just a fraction above its lowest levels in six years.
The oil jitters hit most key regional markets, with Shanghai down 0.49 per cent and Hong Kong paring 0.46 per cent. Tokyo shed 1.32 per cent and Sydney lost 0.83 per cent.
"Add to that the rate hike concerns and the Chinese economic woes, and you may see the STI (Straits Times Index) going down further to possibly hit another full-year low," remisier Chung Chun He told the Straits Times.
The STI dropped for the third day, sliding 12.73 points or 0.44 per cent to 2,848.46. Across the whole market, 959.2 million shares were transacted, pointing to another lukewarm session.
STI's current 12-month low was 2,787.94 on Sept 29 - about 70 points south of the current level. Investors should not test whether this level will hold, Mr Chung cautioned.
"My advice would be to hold your cash and wait at least until after next week to see where the markets go after the Federal Reserve meeting. Prices may go further down, in which case you can come back and look for good values."
As many as 21 constituent counters of the STI ended lower, with Ascendas Real Estate Investment Trust losing the most among the blue chips. It sank 10 cents or 4.2 per cent to $2.28, after announcing the price of its 90 million new private placement units: $2.223 apiece.
The fund-raising exercise will finance Ascendas Reit's move to acquire One@Changi business park for $420 million via a joint venture, as announced on Tuesday.
Sembcorp Marine, shrouded in the gloom of contract woes, pared seven cents or 3.88 per cent to $1.735.
Both CapitaLand counters also dropped. CapitaLand Mall Trust shed 2.5 cents or 1.3 per cent to $1.895, and CapitaLand Limited itself closed four cents or 1.24 per cent lower at $3.18.
Hutchison Port Holdings Trust gained the most among STI stocks, adding 1.5 US cents or 2.83 per cent to 54.5 US cents. Telcos Singtel and Starhub were both up, with Singtel rising four cents or 1.05 per cent to $3.85 while Starhub put on four cents or 1.12 per cent to close at $3.61.
Investors also learned yesterday that SingPost chief executive Wolfgang Baier has resigned, an announcement made after markets closed.
Mr Baier is credited with boosting SingPost's e-commerce unit, which contributed 29 per cent of total revenue in the three months to Sept 30, when group net profit rose 38.5 per cent year-on-year to $53.4 million.
SingPost dropped two cents or 1.13 per cent to $1.755 yesterday, ahead of the announcement.