Mar 13, 2014

    STI sinks on China and Ukraine woes

    SINGAPORE shares slipped into negative territory yesterday, with fresh signs of a China slowdown and ongoing tensions in Ukraine continuing to weigh on regional and local equity markets.

    The benchmark Straits Times Index fell 31.97 points to close at 3097.43, with commodity trader Noble Group - the worst performer on the index - slipping 3.6 per cent to close at $1.07.

    Noble retreated from a three-month high of $1.11 on Tuesday. Some 26.9 million shares changed hands.

    "Part of Noble's business is in industrial metals. With copper prices seeing a sharp decline over the past few days, that has triggered a ripple effect in the unwinding of investments in riskier assets," CMC Markets analyst Kenny Kan said.

    Shanghai copper futures fell 5.4 per cent at the open, marking a fifth straight loss to 43,690 yuan a tonne, their lowest level since July 2009.

    Sharp falls in industrial commodity prices have fuelled traders' concerns about the health of China's economy, with the Asian market watching for China's industrial output, retail sales and urban investment data due today.

    Among the top active stocks were DBS Group Holdings, which slipped 1.25 per cent to $15.85 with 9.25 million shares changing hands, and United Overseas Bank, down 2.1 per cent to $20.04 with 4.03 million shares changing hands.

    Olam extended robust gains, climbing 1.3 per cent to $1.995, with 16.25 million shares changing hands.

    Meanwhile, the Singapore Exchange issued "trade with caution" announcements on two companies, Ziwo Holdings and Giken Sakata yesterday, after they were unable to explain unusual trading.

    When queried about a 136.4 per cent surge in its share price between Tuesday and yesterday, Ziwo, a materials manufacturer, said that it is "not aware of any reasons that could possibly explain the trading in its securities".

    SGX also issued a query to Giken Sakata on Tuesday over a 61.7 per cent jump in its share price between Monday and Tuesday. In response, the firm said a substantial shareholder, Miyoshi Precision, had sold its entire shareholdings of 69.9 million shares in Giken Sakata at 5.4 cents apiece on Tuesday.

    Giken said it announced on Tuesday that it received a listing and quotation notice relating to a proposed share subscription of 52 million new ordinary shares in the capital of the company.

    Recent episodes of sharp price movements in certain penny stock counters have led to further SGX rules in this area, which took effect on March 3.