Dec 12, 2013

    No end to gloom on S'pore bourse

    THE local bourse lost more ground yesterday, in line with its Asian regional peers as investors remained fixated on worries over a scaling back of the United States stimulus programme.

    A decline on Wall Street overnight and year-end blues as investors closed their books added to the weak sentiment.

    Traders also shrugged off a deal reached in the US on Tuesday, to avoid a repeat of the US government shutdown.

    Positive data emerged from the world's largest economy as US job openings in October climbed to the highest level in five years, signalling employers' confidence in the economy.

    But none of these patches of good news mattered.

    The key Straits Times Index (STI) slipped 20.98 points or 0.7 per cent to 3,060.74. Japan's Nikkei 225 retreated 0.6 per cent, Hong Kong's Hang Seng lost 1.7 per cent, and China's Shanghai Composite fell 1.5 per cent.

    This is the seventh straight day the STI has been in the red, shedding 128.02 points, or 4 per cent, over this bad run. For this year so far, the local bourse's key barometer is down 3.4 per cent.

    While analysts appear generally optimistic over the Singapore market - it is likely to benefit strongly from the recovery in developed markets - there are downside risks.

    Deutsche Bank Research said the stimulus cuts and interest-rate normalisation could destabilise flows, push up rates and cause stress to Singapore's property market, household balance sheets and banks.

    Golden Agri-Resources led the losses, falling 1.5 cents or 2.7 per cent to 54 cents. Other plantation stocks slid too. Wilmar International fell three cents or 0.9 per cent to $3.38, while First Resources slipped three cents or 1.4 per cent to $2.13.

    In a recent report, CIMB Research advised investors to be selective in their exposure to the palm-oil sector.

    It prefers First Resources, which owns one of the youngest and most profitable estates, and Wilmar, which it deems a prime beneficiary of higher palm-oil supplies.

    Banking stocks fell, with DBS Group Holdings off 18 cents or 1.1 per cent to $16.56. United Overseas Bank lost 32 cents or 1.6 per cent to $20.26, while OCBC lost nine cents or 1 per cent to $9.83.

    The fall in these three counters shaved 11 points off the STI. Of the 30 index stocks, only two rose while 24 suffered losses.

    Penny stock Albedo continued to hog the spotlight as the most actively traded, with some 354 million shares worth $17 million done. The counter rose 0.9 cent or 21 per cent to 5.2 cents.