Jul 01, 2014

    STI falls despite regional gains

    GAINS in markets across the region failed to boost the local bourse yesterday.

    The benchmark Straits Times Index (STI) ended the first half of the year on a losing note, falling 15.38 points or 0.47 per cent to 3,255.67.

    Regional markets fared better, with Tokyo rising 0.4 per cent and Shanghai ahead by 0.6 per cent. Hong Kong was one of the few bourses to follow Singapore into negative territory as the Hang Seng Index fell 0.1 per cent.

    The general sense across the region was one of slight optimism as interest rates in advanced economies are likely to remain low for some time.

    There are also expectations that the United States will release positive job figures for last month on Thursday. The data is arriving a day earlier - it is typically published on the first Friday of the month - as Friday is a holiday in the US.

    According to a Reuters poll of economists, jobs are expected to increase by 213,000 last month for the fifth straight month of gains above 200,000.

    That will provide further evidence of the economic recovery.

    However, investors here were looking instead to take money off the table, with the local market outperforming regional bourses in the first half of the year.

    The STI has gained 2.8 per cent since Jan 1, compared with a rise of only 0.8 per cent in Sydney. Decliners for the six months include Hong Kong, down 0.5 per cent; Shanghai, which fell 3.2 per cent; and Tokyo, off by 6.9 per cent.

    The STI's declines yesterday were broad-based, with 19 losers and only six gainers and five counters closing flat.

    "We do not see the markets recovering soon in the absence of fresh factors and continued worries over political uncertainties in some areas.

    "Growth will be slight or flat, which does not generate interest in such a market," said NetResearch Asia in a note.

    "Penny stocks will still be traded on situational interest but this will likely not spread to the broader market."

    On the new listings front, two counters started trading on the Catalist board with very different performances.

    Carpet specialist SMJ International Holdings closed at 32.5 cents, up 4.5 cents or 16 per cent from its initial public offering (IPO) price of 28 cents.

    But IPS Securex Holdings, a provider of security products and integrated security solutions, headed the other way.

    It closed trading at 29 cents, down six cents or 17 per cent from the IPO price of 35 cents.