STI dips on regional slump
SLUMPING stock markets across the region sent Singapore shares in the same direction yesterday, as investors await data that could provide more evidence of a slowdown in China.
The benchmark Straits Times Index (STI) shed 8.48 points to 3,296.57, while trading volumes remained modest with 1.56 billion shares worth $902.7 million changing hands.
Desmond Chua, a market analyst at CMC Markets in Singapore, said investors will be watching developments out of China after a series of economic reports came in below expectations. He added that another weak reading "will underscore weakness in the Chinese economy".
There was red ink across the region: Tokyo was down 0.71 per cent, Sydney 1.29 per cent and Seoul 0.71 per cent. Fears that the preliminary data due in China today could indicate that manufacturing activity is contracting were particularly acute in Shanghai, where shares slumped 1.7 per cent, and Hong Kong was down 1.44 per cent.
The 30 STI component counters here closed mixed, with 18 losers, 11 gainers and one unchanged.
The STI was hit hard by laggards Jardine Matheson, down 0.5 per cent or 33 US cents to US$62.07, and Jardine Strategic, which fell 0.7 per cent or 27 US cents to US$36.
OCBC Bank lost 1.5 per cent or 15 cents to $9.72, with 3.3 million shares changing hands, as investors priced in the upcoming conclusion of its one-for-eight rights issue.
LCD Global Investments was the most actively traded, gaining 1.8 per cent or 0.5 cent to 28.5 cents, with 313.3 million shares changing hands.
A trading halt on LCD's shares was lifted after the market closed on Friday. That set the stage yesterday for the stock to move on news that Lum Chang Investments and other shareholders have sold a combined 29.5 per cent stake in the resorts operator firm to privately held JTrust Asia.
LCD will eventually be known as JTrust International. JTrust Asia is a wholly owned subsidiary of JTrust, a finance and real-estate group headquartered in Japan. It has $125 million in capital.
The sale involves 310.4 million ordinary shares at 30 cents each, for a total of $93.1 million.
"There is talk that the deal is unfair to minority shareholders, who are forced to accept the change in management, without the ability to cash out on the same terms as the Lum family. Some say this is an attempt to circumvent the takeover offer code, where a buyer who buys a more than 30 per cent stake in a company is obliged to make a takeover offer," a remisier said.