Dec 01, 2015

    Late selling sends STI into the red

    THERE were indications that the Straits Times Index (STI) might see some month-end window-dressing.

    And given that volume in the 30 STI components spiked up to 400 million units worth $1.3 billion - about twice last week's average - this was likely the case.

    However, last-minute selling of several index stocks ensured the STI reversed an 8-point gain at 5pm to close a net 3.18 points weaker at 2,855.94 after the post-closing adjustments at 5.10pm.

    Overall, turnover amounted to 1.4 billion units worth $1.7 billion and excluding warrants, there were 166 rises versus 225 falls.

    An absence of direction from overseas was cited as a reason for the lethargy as traders waited for the International Monetary Fund's decision on whether China's yuan is to be admitted as a reserve currency.

    Also on the horizon is the upcoming United States Federal Open Markets Committee meeting, which is widely expected to yield an interest rate hike.

    Index stocks which saw heavy trading included Genting, Noble Group, Hongkong Land and Singtel. Telco Singtel ended three cents stronger at $3.83 with 35.5 million done.

    OCBC Investment Research yesterday issued an "overweight" on the telecom sector, saying it believes that the three companies will stand out in an increasingly uncertain market next year, given their defensive business, strong cash-flow generating abilities and relatively attractive yields.

    "We currently have buys on all the three telcos but M1 stands out in terms of highest expected total return. It could see the strongest share price recovery if concerns of a new telco prove to be unfounded," said the broker.

    Elsewhere, most South-east Asian stock markets tracked weaker Asian shares lower yesterday, sending key indexes in Malaysia and Indonesia to near-one-week lows while investors cut holdings in energy shares in the region amid weak global oil prices.

    Asian shares were on edge yesterday after a sharp fall in Chinese markets in the previous session, while the euro hovered near a seven-month low as the currency braced for the European Central Bank's monetary easing later this week.