Nov 12, 2014

    No news is bad news for local stocks

    A LACK of market-moving data and concerns about the competition posed by a new Greater China exchange trading link led stocks here lower yesterday.

    The Straits Times Index (STI) fell 8.9 points or 0.3 per cent to close at 3,292.15.

    Trading was anaemic, with just 1.1 billion shares worth $951.6 million shares changing hands.

    An absence of major economic or business data gave investors few leads about the state of the global economy.

    The focus was instead on a new link between the Hong Kong and Shanghai exchanges, which will effectively create the world's third-largest equity market, stealing some of Singapore's thunder, said remisier Alvin Yong.

    "The main reason for the decline yesterday was that our market has been bypassed, with the action going to Hong Kong. This move seems to benefit a lot of the banks and brokerages in Hong Kong, which is expected to see increased trading on its exchange."

    Stocks here fell despite record highs recorded overnight on Wall Street, as both the Dow Jones Industrial Average and the S&P 500 hit record highs for the fourth straight session.

    That helped most Asian bourses to end in positive territory: Tokyo added 2.1 per cent, Seoul gained 0.2 per cent and Hong Kong was up 0.3 per cent.

    But Shanghai fell 0.2 per cent and Sydney lost 0.1 per cent.

    Banks saw some of the biggest falls, leading the STI lower.

    United Overseas Bank lost 36 cents or 1.5 per cent to $23.09, DBS Group Holdings dropped 22 cents or 1.1 per cent to $19.43 and OCBC gave up 10 cents or 1 per cent to $10.10.

    Commodities firm Olam International bucked the trend, rising 11 cents or 5.2 per cent to $2.24, prompting a query from the Singapore Exchange, the second such query about sudden price changes in six months.

    Marine plays kept sliding with oil prices falling while stockpiles in the United States are forecast to rise, indicating that supply is outstripping demand.

    Keppel Corp lost three cents to $9.41 while SembCorp Marine dipped a cent to $3.56.

    Semiconductor firm Stats ChipPAC fell half a cent to 46 cents, moving closer to the takeover price of 45.2 cents offered by Jiangsu Changjiang Electronics Technology.

    Standard & Poor's warned in a note yesterday that it has placed the firm on a negative credit watch "because Stats ChipPAC will not benefit from the likelihood of extraordinary government support if Temasek Holdings sells its stake in the company". Temasek owns 84 per cent of the firm.

    Professional services firm Zico Holdings made a bright market debut, as it closed at 51.5 cents, a 72 per cent jump on its initial public offer price of 30 cents.

    The Catalist-listed firm, which sold 48 million new shares in the IPO, was among the top active counters with 20.7 million shares traded.