Sep 25, 2014

    Euro zone woes hit S'pore stocks

    A SELL-OFF in New York and Europe on mounting concerns that deflation is spreading across the euro zone sent Singapore shares into negative territory yesterday.

    The Straits Times Index lost 5.28 points to 3,292.81, with 1.27 billion shares worth $804 million changing hands.

    United States and European stocks fell on Tuesday after a closely watched gauge of business activity in the 18-nation euro zone slipped again this month, fanning worries about the region's recovery.

    "Geopolitical risk, which has been simmering in the background, is back to the fore, as the US and their Arab allies launched air strikes (against) ISIS positions potentially increasing instability in the region," CMC analyst Desmond Chua wrote in a note.

    "Helping to limit losses in the equity markets, however, was the continual outperformance of economic indicators, with US manufacturing activity clocking a four-year high," he said.

    "Better-than-expected Chinese factory data also alleviated concerns that the second largest economy was facing a slowdown."

    Asian markets ended mixed, with Tokyo slipping 0.11 per cent, Sydney easing 0.85 per cent, while Shanghai added 0.10 per cent and Hong Kong and Seoul were flat.

    The actives list here was led by water treatment firm SIIC Environment, which fell 1.7 per cent or 0.3 cents to 17.3 cents on trade of 143.6 million shares.

    Pacific Century gained 1.9 per cent or 0.5 cents to 27 cents with 50.4 million shares traded while Metal Component Engineering jumped 1.4 per cent or 0.1 cents to 7.3 cents on volumes of 36.6 million shares.

    Malaysian office furniture firm Versalink's $11.1 million initial public offering (IPO) listing took the total amount of funds raised on Catalist to $253.8 million this year, compared with the $253.3 million raised in 2013.

    The bumper haul marks this year as a record year for Catalist since the board was launched six years ago, according to an SGX market update.

    Versalink closed above its IPO price of 30 cents a share at 34 cents with about 28 million shares were traded.

    Remisier Alvin Yong said he expects to see more Catalist listings in the near future.

    "It's not surprising that more companies prefer to list on Catalist. Not only is the listing process less onerous than that on the mainboard, the new minimum trading price rule is also deterring companies from seeking a mainboard listing unless they are of a certain size."

    In response to an SGX query about its trading activity, Sinjia Land said it is "in the process of restructuring its existing businesses, and is in discussions for a proposed divestment of its loss-making elastomeric business unit".

    Sinjia closed down two cents, or nearly 10 per cent, to 18.5 cents.