STI flat on bargain hunting

PROFIT WARNING: Genting Singapore fell to 82.5 cents after it said it expects a "significant decline" in net profits after tax for Q2.


    Aug 06, 2015

    STI flat on bargain hunting

    SINGAPORE shares closed a hair's breadth inside positive territory as bargain hunters managed to overcome market bears that had sent the bourse down 0.8 per cent at the opening bell yesterday.

    The Straits Times Index closed flat, up 0.01 per cent or 0.35 point, to 3,191.39 as traders continued to square their positions ahead of the SG50 long weekend and release of United States non-farm payroll data tomorrow, which could offer clues on the timing of the US interest rate lift-off.

    Weighing down the index was Genting Singapore, whose second-quarter profit warning sent the casino counter sinking 8.3 per cent or 7.5 cents to 82.5 cents, with 61.4 million shares traded.

    The mainboard-listed casino operator, which is releasing its results next Thursday, said that it expects to report a "significant decline" in net profits after tax for the second quarter ended June.

    "This is due mainly to fair value loss on derivative financial instruments as a result of unfavourable market conditions and unrealised foreign exchange translation losses," Genting said in a statement to the Singapore Exchange on Tuesday.

    CMC Markets analyst Nicholas Teo said: "The market knows Genting has been suffering losses from declining VIP gaming revenues and they are having a hard time collecting debt from the high rollers. But how much did they lose investing in financial derivatives?"

    Noble Group continued to hog the most actively-traded list, dropping 5.8 per cent or 3.5 cents to 56.5 cents, with 160.4 million shares traded.

    "That could be a pullback from Tuesday's 28 per cent rebound," Mr Teo said. "There's also speculation that the former substantial shareholder Invesco may still be selling."

    In SGX filings on Tuesday, it was disclosed that fund manager Invesco had on Friday sold 33 million shares at 44.58 cents, bringing its stake down from 5 per cent to 4.5 per cent.

    Meanwhile, positive second-quarter earnings posted on Tuesday by Sembcorp Industries helped power the utilities and marine group up 8.7 per cent or 30 cents to $3.76.

    The company's net profit rose 24.9 per cent to $223.56 million for the three months ended June 30, from a year earlier, on the back of a $54.71 million one-off gain from disposing of a unit in April.

    Turnover fell 5.8 per cent to $2.39 billion for the second quarter, with weaker contributions from its utilities, marine and urban development segments.

    But those declines were mitigated by higher contributions from a unit dealing with "specialised construction activities", the group said.

    Bargain hunters also zoomed in on Sembcorp Marine, Keppel Corp and Global Logistic Properties (GLP). Sembcorp Marine gained 4.7 per cent or 12 cents to $2.69, while Keppel Corp rose 3.3 per cent or 24 cents to $7.62. GLP gained 0.4 per cent or one cent to $2.36, with 60.2 million shares traded.