Apr 24, 2014

    S'pore shares down on weak China factory data

    A WEAK set of data on China's manufacturing scene dragged down shares across much of the region, including Singapore, where the benchmark Straits Times Index retreated 19.52 points, or 0.6 per cent, to 3,258.01.

    A report by HSBC and Markit Economics out yesterday showed that, although China's manufacturing sector performed slightly better this month than last month, it was still contracting.

    The report is "an indication that there's some fairly serious weakness in China's manufacturing sector", said Peter Elston, the head of Asia-Pacific strategy and asset allocation at Aberdeen Asset Management, in an interview with Bloomberg.

    "I certainly wouldn't argue that the slight increase compared with the previous month is a sign of things turning around."

    Several bourses across Asia declined, with Shanghai down 0.26 per cent, Hong Kong sliding 0.97 per cent, Taiwan slipping 0.2 per cent and Seoul losing 0.19 per cent. Tokyo, however, rose 1.09 per cent.

    Singapore banking stocks declined on profit-taking, with DBS Group Holdings down 10 cents to $16.80, OCBC Bank slipping three cents to $9.62 and United Overseas Bank dropping 20 cents to $22.25.

    CapitaMalls Asia continued to be a hotly traded stock, rising a cent to $2.22, the price at which parent CapitaLand has offered to buy up all the shares in the mall operator that it does not already own.

    Mapletree Industrial Trust climbed half a cent to $1.43, after announcing on Tuesday a fourth-quarter distribution per unit of 2.51 cents, up 7.2 per cent from the same period a year earlier.

    CIMB Research analyst Pang Ti Wee yesterday reiterated his advice for investors to buy the stock, saying the trust has room to grow.

    Centurion Corp lost 1.5 cents to 73 cents, after saying that it has sold its Australian optical-disc unit for $1.24 million.

    "This is positive, as the business has been incurring losses and eroding margins," wrote DMG & Partners Research analyst Jarick Seet, who maintained his "buy" rating on the stock.

    "With the sale, margins will improve as the company puts greater focus on its accommodation business despite a drop in revenue."

    Osim International gained nine cents to $2.80, after a Maybank Kim Eng Research report forecast that the firm will be sitting on net cash of almost $300 million and generating free cash flow in excess of $100 million by the end of the year.