Apr 11, 2014

    Jardine stocks weigh down S'pore shares

    SINGAPORE shares looked set for gains yesterday, in line with other key regional markets, but were ultimately dragged down by the Jardine stocks.

    The benchmark Straits Times Index shed 6.34 points, or 0.2 per cent, to close at 3,203.58.

    Volumes were relatively more upbeat than usual, with 1.9 billion shares worth $1.2 billion changing hands.

    Dealers said the main market dampener was the Jardine family of three counters - Jardine Cycle & Carriage, Jardine Strategic and Jardine Matheson - which were affected by the surprise results in the Indonesian election.

    Investors were spooked by the prospect of Indonesia facing a period of political uncertainty, after an unconvincing election win by the main opposition party. This means it will likely need to find allies to back its candidate for the presidential vote in July.

    Jardine C&C has considerable exposure to Indonesia because it is the biggest shareholder of giant motor distributor Astra International, they noted.

    Jardine C&C sank $2.83 to $45.37, Jardine Strategic slid US$1.33 to US$34.20 and Jardine Matheson slipped US$2.20 to US$60.30. These three counters alone accounted for a 15-point slide in the STI yesterday.

    In contrast, investor sentiment in the region was mostly upbeat, thanks to the United States Federal Reserve meeting minutes that contained no imminent plans to raise interest rates.

    The meeting notes made no reference to an earlier suggestion by Fed chairman Janet Yellen that the first interest rate hike could occur six months after the end of its massive bond-buying programme.

    Asian traders were also cheered by China's plans to connect the stock exchanges of Hong Kong and Shanghai as part of efforts to expand its markets.

    The news sent Hong Kong shares charging up 1.5 per cent and Shanghai stocks soaring 1.4 per cent. Japan equities ended flat.

    Back home, there were 15 gainers, nine losers and six unchanged among the 30 STI component counters.

    The gainers included CapitaMalls Asia, up 4.5 cents to $1.805, and Hutchison Port Holdings Trust, two US cents in front at 66.5 US cents.

    Keppel Corp was in the spotlight after it said on Wednesday that it has inked an agreement to manage a large shipyard in China, rising 12 cents to $11.12.

    CIMB analyst Lim Siew Khee noted that Keppel's move helps it pre-empt competition and allows the group to tap into the ready financing available to the local China players.

    Ezion Holdings was also on the investor radar after it said on Wednesday that it has bought a substantial shareholding in marine and offshore services firm Ausgroup. Ezion dipped a cent to $2.09 while Ausgroup dropped 2.5 cents to 48.5 cents.

    The day's most active stock was Albedo, which tumbled 0.4 cents to 2.7 cents with 342.7 million units done.