Lacklustre STI mirrors Wall Street
LOCAL shares remained subdued yesterday, following two days of declines, as investors cashed in on blue chips while keeping most of their attention on penny plays.
The benchmark Straits Times Index (STI) closed 2.8 points or 0.08 per cent down to 3,356.37. The index had hovered around 3,370 before a late sell-down wiped off the gains.
The lacklustre momentum at home reflected the tepid activity on Wall Street, where the Dow Jones Industrial Average dropped for the second day running, losing 0.38 per cent as disappointing results from tech giants such as Apple hit sentiment.
Singapore is also entering the corporate results season, so stocks will move in tandem with the financial figures, remisier Desmond Leong said.
"In terms of earnings outlook, oil and gas plays will likely remain weak and I expect key counters such as Keppel Corp to continue their recent poor form," he added.
Keppel gained two cents or 0.25 per cent to $8.16 yesterday, but was still down 2.9 per cent over the past month. Ezra Holdings closed 0.2 cent or 1.33 per cent down at 14.8 cents, while Ezion Holdings dropped 0.5 cent or 0.55 per cent to 90.5 cents.
Singapore banks will remain a haven for stability, Mr Leong added, noting their consistently stable earnings and upcoming rate hikes as positive factors.
All three lenders have been gaining over the past week, with DBS Bank rising six cents or 0.28 per cent to $21.38 yesterday. OCBC Bank was up seven cents or 0.68 per cent to $10.42, and United Overseas Bank ended four cents or 0.17 per cent higher at $23.42.
Hutchison Port Holdings Trust was the top gainer, up 1.5 US cents (two Singapore cents) or 2.48 per cent to 62 US cents. It reported on Wednesday that second-quarter profit rose 8.5 per cent.
At the other end of the spectrum, Noble Group lost two cents or 3.08 per cent to 63 cents. There were 127.5 million shares traded as the commodity firm likely undertook another round of share buybacks yesterday.
Meanwhile, the pennies were still rife with activity. CEFC International remained on punters' radar, gaining a further 12 per cent. The counter has now increased around tenfold, and investors will do well to avoid it, Mr Leong warned.
"Pennies are all about risk-taking, but caution is still necessary. My advice to investors interested in playing pennies is to look at stocks that are just starting to rise, say for the first one or two days. Beyond that, you have to be careful."
In overseas markets, China remained on a recovery track, with Shanghai up for the sixth day to end 2.43 per cent higher, while Hong Kong gained 0.46 per cent. Investor confidence is slowly returning on the back of government support but the market may still move sideways, IG premium client manager Nabil Mattar said.