Jan 14, 2014

    STI dips on weak US jobs data

    THE sluggish tone that has dogged the year's trading so far persisted yesterday. The session had dull written all over it.

    The benchmark Straits Times Index (STI) slipped 8.38 points or 0.27 per cent to 3,135.49.

    Its regional peers were mixed. The Nikkei 225 in Japan and the Hang Seng in Hong Kong gained some 0.2 per cent, while China's Shanghai Composite lost 0.2 per cent. Australia's ASX 200 retreated by 0.4 per cent.

    A key factor in the uninspiring mood was weak jobs data out of the United States on Friday. Most analysts blamed unusually cold weather that gripped the country last month. The poor report has raised speculation that the US Federal Reserve may pause the tapering of its stimulus programme later this month.

    However, most analysts think a pause is unlikely, given confidence in the strength of recovery in the world's largest economy.

    The end of loose US monetary policy, which fuelled a surge in Asian equities over the past year or so, does not mean doom and gloom for Asia. "Asia is now a value asset held back by fears that it cannot stand without the help of accommodative global monetary policy. This is the wrong fear," said CIMB Research in its latest strategy report. "The Asean structural story remains intact."

    The research house has an overweight call on the Singapore market as it would benefit from an improvement in the global backdrop. It maintains its year-end target of 3,600 for the STI - 15 per cent upside.

    Such optimistic projections contrast with lacklustre trading since the start of the year, with the STI losing some 32 points, or 1 per cent, over eight sessions.

    Trading volume continues to disappoint. Yesterday, some 3.38 billion shares worth only $785.6 million changed hands, with trading in blue chips continuing to take a back seat to penny stocks.

    Sembcorp Industries led the losses, falling 11 cents to $5.31. Sembcorp Marine fell six cents to $4.28. Keppel Corp lost five cents to $10.98.

    Albedo was the most active, with 1.4 million shares traded. The counter slid 0.5 cent to 5.9 cents.

    Newly listed Frasers Centrepoint jumped 15 cents - 10 per cent - to $1.67. The property firm started trading on Thursday after being spun off from parent company Fraser and Neave.

    Chinese shipbuilder JES International Holdings and property developer Goodland Group both called for trading halts on their counters yesterday morning.

    Ezra Holdings retreated by seven cents to $1.27. The offshore-services firm last week reported a 6 per cent drop in quarterly earnings.