Aug 16, 2016

    Flat trade as DBS, UOB slip on debt issues

    SINGAPORE shares closed flat yesterday, weighed down by weaker sentiment over DBS Group and United Overseas Bank

    after Keppel Corp affiliate KrisEnergy sounded a warning on its debt covenants.

    The Straits Times Index ended down

    0.01 per cent or 0.19 point to 2,867.21, hit by DBS, which slipped 1.2 per cent or 18 cents to $14.86.

    UOB fell 1.5 per cent or 27 cents to $17.65.

    KrisEnergy dropped 2.4 per cent or 0.3 cent to 12.1 cents after posting a second-quarter loss and warning that some covenants on debt agreements could come under stress in the near term as

    weaker oil markets hit revenue.

    The oil and gas producer has a $200 million bond due in August 2018 and a US$148.3 million

    (S$199 million) secured revolving credit facility

    with DBS.

    Noble Group fell 3.4 per cent or 0.5 cent

    to 14.3 cents, with 92.4 million shares traded.

    Fitch Ratings noted that a liquidity crunch

    may be temporary and that it could make

    about $900 million in the coming months,

    including proceeds from a rights issue.

    Bucking the weak sentiment, SingTel gained

    1.4 per cent or six cents to $4.31.

    Maybank Kim Eng, which has a buy call

    on the telco, said its "mobile data growth across

    all markets should provide solid support

    in a year when a new rival is expected".

    "A data boost from the launch of Pokemon Go in Singapore is another potential catalyst, as Singtel's average data consumption of 2.6GB is the lowest among the three telcos," the brokerage added.

    Oil and gas related plays, among the most actively traded, benefited from higher oil prices.

    Vallianz jumped 4.5 per cent or 0.1 cent to

    2.3 cents, with 34.5 million shares traded.

    Small- to mid-cap counters such as Courts Asia, Yanlord Land Group and Delfi saw punting interest.

    "The market has regained some form of stability post-Swiber, and retail investors are punting undervalued small and mid-cap companies,

    as some have announced better than expected results," remisier Alvin Yong said.

    Courts Asia gained 4.8 per cent or two cents

    to 44 cents, after posting a nearly 56 per cent surge in Q1 net profit to $9.42 million from a year ago.

    Chinese property developer Yanlord rose

    2 per cent or 2.5 cents to $1.265 after posting

    an 89 per cent jump in net profit for the second quarter to 323.95 million yuan (S$66 million).