Dec 31, 2014

    Greenback, Greece weigh on STI

    LOCAL shares ended slightly lower on concerns over a stronger greenback and Greece's political woes, in fairly thin trade ahead of the New Year holiday.

    The Straits Times Index ended 1.58 points lower at 3,366.11, with one billion shares worth $664.9 million changing hands.

    "There is some resistance at the 3,360 level," remisier Desmond Leong noted.

    Political uncertainty in Greece, along with a stronger United States dollar driving a further sell-off in commodities, also weighed on sentiment. A snap election in Greece on Jan 25 could threaten the financial bailout that has helped keep the country afloat.

    "But investors shouldn't be too worried because the euro zone today is stronger than in 2012. So the contagion from another possible Greek crisis may be limited within Greece itself," remisier Alvin Yong said.

    Richard Jerram, chief economist of the Bank of Singapore, said in a note yesterday: "The rest of the euro zone is well-placed to withstand a Greek default as the issues have been largely ring-fenced."

    Meanwhile, the greenback's strength continued to pressure commodities - which become more expensive as they are priced in dollars and may be less appealing to holders of weaker currencies.

    Oil futures fell as lingering worries on a global supply glut offset concerns over output disruptions in Libya. Brent crude dropped 1 per cent to US$57.30 after hitting 51/2-year lows.

    At home, the most active stock was Compact Metal Industries, which jumped 6.8 per cent or 0.3 cent to 4.7 cents, with 82.9 million shares traded.

    The penny counter was the hot stock of the day, after announcing that it had entered into a conditional placement agreement with SL Capital Ventures for 160 million new shares of the company at an issue price of five cents each.

    About $8 million in proceeds will be used for general working capital and proposed investments in a new cement business.

    Other top volume counters included Top Global, which soared nearly 17 per cent or 0.1 cent to 0.7 cent, with 55.8 million shares traded; and Golden Agri-Resources, which jumped 2.22 per cent or 0.1 cent to 46 cents, with 32 million shares changing hands.