May 06, 2015

    S'pore bourse hit by slump in Chinese equities

    SINGAPORE shares ended lower yesterday, dragged down by a slump in Chinese equities as worries about margin trading and a slowing mainland economy took some fizz out of the rally in North Asian markets.

    A bout of profit-taking ahead of the release of United States non-farm payroll data on Friday also drove the benchmark Straits Times Index lower by 11.51 points to close at 3,471.19 in a day of thin trading. Some 1.5 billion shares worth $827 million changed hands.

    Shanghai plunged 4 per cent on worries of further government measures curbing speculation and that new share sales may divert funds from existing equities.

    Local Chinese media also reported two more securities firms - Haitong Securities and Tebon Securities - have raised the requirements for margin financing.

    The firms lifted the amount of cash clients need to deposit and cut the amount of securities they can use as collateral for margin trading and short selling.

    The Hang Seng China Enterprises Index on mainland stocks traded in Hong Kong dropped 2.6 per cent, while the Hang Seng Index slipped 1.3 per cent.

    Taiwan lost 0.3 per cent. Markets in Japan, South Korea and Thailand were closed yesterday for holidays.

    The sell-off in Chinese equities also sent S-chips, or Singapore-listed Chinese firms, into negative territory.

    Among the most actively traded stocks were SIIC Environment, which plunged 9 per cent or two cents to 20 cents, with 55.7 million shares traded. Pacific Andes slipped 4.3 per cent or 0.3 cent to 6.6 cents, with 22.8 million shares changing hands.

    China Fishery fell 2 per cent or 0.4 cent to 19.2 cents, with 13.6 million shares traded.

    Penny plays dominated.

    Stratech, an information technology and technology solutions provider, plunged 8.8 per cent or 0.3 cent to 3.1 cents with 142.1 million shares traded; while MDR, a mobile phone, prepaid card and gadget retailer jumped 16.7 per cent or 0.1 cent to 0.7 cent on 98.2 million shares done.

    "When the market is range-bound and there's a lack of catalysts, penny stocks tend to receive speculative attention," remisier Alvin Foo said.

    Meanwhile, shares of Noble Group jumped 4.1 per cent or 3.5 cents to 89 cents, with 50.5 million shares changing hands ahead of the release of its first-quarter results after the market closed.

    The commodities trader, which did not give a reason for bringing forward its earnings release by two days, said its first-quarter net profit fell by nearly a third from a year earlier as performance at its associates fell short of expectations.

    Net profit fell 30 per cent to US$106.51 million (S$142 million) from US$152.34 million a year earlier, the company said. Revenue fell 7 per cent to US$16.64 billion.