Apr 15, 2014

    Jardine stocks put STI back in the black

    GAINS by Jardine shares and local banks dragged the benchmark into the black on a day when most regional bourses traded flat or down.

    The Straits Times Index (STI) yesterday added 16.61 points, or 0.52 per cent, to 3,214.83.

    The advance was thanks, in large part, to the gains in the Jardine shares. Jardine Matheson Holdings, Jardine Strategic Holdings, Jardine Cycle & Carriage and Hongkong Land all rose yesterday, adding 9.52 points to the index.

    The three banks - DBS Group Holdings, OCBC Bank and United Overseas Bank - also advanced between 0.2 per cent and 0.6 per cent each to add a total of 4.37 points to the index.

    But the big news of the day involved two shares that were not even trading. CapitaLand and CapitaMalls Asia were both halted as CapitaLand unveiled a cash offer for the rest of its retail malls subsidiary.

    CapitaLand wants to delist CapitaMalls Asia and the $2.22-per-share offer is conditional on it getting enough acceptances to raise its stake from 65.3 per cent to 90 per cent.

    CapitaMalls Asia is an STI index stock, and a successful delisting would lead to more chatter that the market is hollowing out, with too few big-name listings to replace the delistings.

    Offshore and marine services provider Ezra Holdings closed unchanged at $1.07.

    DBS Group Research kept its "hold" call on Ezra but cut its target price from $1.40 to $1.22.

    "Core net profit for the second quarter of financial year 2014 came in at US$3 million (S$3.8 million) excluding the US$16.6 million gain from the sale and leaseback of an asset by associate EOC. This missed our estimate, as the offshore chartering division was hit by unplanned repair and maintenance works on several vessels," said DBS.

    It maintained its "hold" call pending evidence of a turnaround in the execution of work in two key divisions (offshore chartering and sub-sea) and more clarity on the listing plans for the sub-sea division EMAS AMC.

    Trading was soft across the market, with only 1.78 billion shares worth $810 million changing hands.

    Elsewhere in the region, Tokyo fell 0.4 per cent but Hong Kong edged up 0.15 per cent and Shanghai inched ahead 0.05 per cent.

    Traders will be looking out for Chinese economic data due tomorrow. "Following weaker exports and imports from trade figures last week, analysts are expecting slower growth from China in the first quarter," said CMC Markets analyst Desmond Chua.