Oct 01, 2014

    Markets down as investors eye HK, US

    THE stock market dropped decisively into negative territory yesterday after several sessions with little action, amid heightened unrest in Hong Kong and speculation over the timing of interest rate hikes in the United States.

    The local benchmark Straits Times Index fell 12.98 points, or 0.39 per cent, to 3,276.74 after being down as many as 33 points in the session.

    Other Asian bourses were largely in the red too. Hong Kong shares sank 1.28 per cent as a pro-democracy demonstration in the city went on for a third day, Tokyo retreated 0.84 per cent and Seoul fell 0.32 per cent to a two-month low.

    Shanghai went the other way, rising 0.26 per cent.

    The MSCI Asia Pacific Index declined 5 per cent last month, amid concerns that Chinese economic growth is slowing and the Federal Reserve may increase US borrowing costs sooner as it ends its asset purchase programme, known as quantitative easing, this month.

    Noble Group was the top active at home, losing 9.5 cents to $1.30.

    The firm said yesterday that it has formed an agri-business joint venture named Noble Agri with Chinese firm Cofco and an investment consortium consisting of Hopu Investment, Temasek Holdings, the World Bank's International Finance Corp and Standard Chartered Private Equity.

    Most other commodity plays also closed lower. Olam International slipped nine cents to $2.35, Wilmar International slid two cents to $3.09 and Indofood Agri declined a cent to 83 cents.

    Golden Agri-Resources bucked the trend, rising half a cent to 51.5 cents.

    Nam Cheong retreated half a cent to 43.5 cents. The shipping firm said on Monday that it had secured sale contracts for three vessels worth about US$41 million (S$52 million) in total.

    CIMB Research has an "add" call on the stock, with analyst Yeo Zhi Bin noting that Nam Cheong has clinched US$505 million worth of vessel sales so far this year, surpassing last year's record of about US$500 million.

    Marco Polo Marine gained a cent to 35.5 cents, after announcing on Monday that Nam Cheong has agreed to invest US$30.7 million in a 30 per cent stake in Marco Polo's indirect unit, Bina Buana Raya.

    DMG & Partners Research analyst Lee Yue Jer maintained his "buy" call on Marco Polo yesterday, saying in a note that the deal could help the firm to lower its debt levels and prepare its balance sheet to take ownership of a new jack-up rig that will be delivered next year.