Dec 11, 2013

    STI losing streak enters a sixth day

    THE local bourse continued its weak showing yesterday, again shrugging off a positive overnight performance on Wall Street.

    The key Straits Times Index (STI) fell 31.92 points, or 1.03 per cent, to 3,081.72.

    Most Asian shares closed lower as well, with Japan's Nikkei 225 losing 0.3 per cent, Hong Kong's Hang Seng down 0.3 per cent and Australia's ASX 200 falling 0.02 per cent.

    This was the sixth straight day the STI suffered losses with continued anaemic trading volumes. Turnover yesterday stood at 1.76 billion shares worth $1.29 billion.

    A recent Credit Suisse report was upbeat on the Singapore market, citing currency stability and inexpensive valuations. Given Singapore's strong global linkages, the house believes Singapore equities offer a "unique, low-volatility exposure to potential growth improvement".

    Yet, several concerns could weigh on investor sentiment. Standard & Poor's (S&P) said labour shortage and property curbs will shrink corporate earnings. It also said another risk is if the weakening in Asian currencies, caused earlier by impending stimulus tapering in the United States, was to persist.

    "Some Singapore corporates have extensive investments in Asia. Therefore, currency depreciation in some Asian countries could drag down the performance of these investments," said the rating agency.

    Albedo, whose shares had been on a trading halt since Friday, resumed trading yesterday afternoon and was actively traded, with 300 million shares worth $13 million done.

    The stock fell 0.9 cent or 17 per cent to 4.3 cents.

    The company made no substantive announcement, except to say that a definitive agreement has yet to be reached on a deal involving a reverse takeover by Infinite Rewards. This involves injecting large parcels of land in Malaysia's Iskandar.

    Meanwhile, it urged shareholders to exercise caution in the trading of shares, which have risen significantly.

    Singapore Windsor Holdings rose 10.5 cents, or a whopping 38 per cent, to 38.5 cents. The sharp spike drew a trading-activity query from the Singapore Exchange.

    Thai Beverage fell two cents, or 4.2 per cent, to 45.5 cents on news that its long-term credit rating had been downgraded by S&P.

    M1 lost one cent, or 0.3 per cent, to $3.17, while StarHub fell five cents, or 1.2 per cent, to $4.13.

    Maybank Kim Eng Research said its top pick for the sector is M1, followed by StarHub as a close second. Its sector picks are based on telcos that can pay more dividends and monetise rising data usage.