Dec 19, 2013

    Market awaits news from US Fed

    TRADING local shares seemed to be the last thing from investors' minds yesterday as they waited for word on whether the flow of cheap money from the United States will continue.

    An ongoing meeting of the US Federal Reserve was expected to release its outcome before Asian markets open today. The key question is whether the central bank will scale back its massive US$85-billion-a-month (S$107-billion-a-month) bond-purchase scheme.

    The programme, which amounts to printing money, has boosted stock prices worldwide, so any reduction will lead to a deflation in share values.

    Despite upbeat economic data from the US recently, most analysts still expect the initial cut to be made only next year.

    The market is "awaiting the Fed's stance", said CMC Markets analyst Kenny Kan.

    The cautious mood left the local market in the doldrums, with the Straits Times Index (STI) slipping 5.79 points, or 0.19 per cent, to 3,061.78.

    But turnover across the market improved to $909 million, from Tuesday's $758 million.

    Only four of the 30 STI component stocks moved more than 1 per cent in either direction.

    Rigbuilder Keppel Corp was one of those that showed more action, although it lost 25 cents, or 2.3 per cent, to $10.56, more than reversing a rise of 19 cents on Tuesday.

    Alcohol-maker Thai Beverage headed the other way, rising one cent, or 2 per cent, to 51 cents.

    Outside the STI, marine logistics group Marco Polo Marine rose half a cent, or 1.35 per cent, to 37.5 cents.

    The company announced earlier this week that its Indonesian subsidiary had secured charter contracts for some of its vessels.

    "The implied charter rates for these contracts are higher than previous rates, but within our expectations," said DMG & Partners Research. It said these charters will provide good earnings visibility for Marco Polo Marine.

    DMG has a "buy" call and target price of 55 cents on the company.

    KLW Holdings was the flavour of the day among traders of penny stocks, rising 0.3 cent, or 10 per cent, to 3.3 cents. About 625.6 million shares changed hands as KLW became the most active counter by units traded.

    Bourses around the region experienced generally muted trades. Hong Kong's Hang Seng Index rose 0.3 per cent, while Shanghai slipped 0.1 per cent.

    An exception was the Nikkei 225 in Tokyo, which powered ahead by 2 per cent. Shares of exporters led the way after the Japanese yen weakened against the US dollar, a currency move which will boost their profits.