Apr 17, 2015

    STI sinks but stays above 3,500 mark

    A FOUR-DAY rally on the Singapore bourse fizzled out yesterday after the Singapore Exchange (SGX) quashed rumours of a possible stock-trading link with China, along the lines of the Shanghai-Hong Kong Stock Connect.

    The Straits Times Index fell 8.34 points to close at 3,531.61, with 2.54 billion shares worth $1.36 billion changing hands.

    "But the fact that the market is still above 3,500 shows it is well-supported, thanks to the spillover effect of the bull run in Hong Kong and China," remisier Alvin Yong said.

    Singapore-listed Chinese firms, or S-chips, were among the most actively traded stocks.

    Water specialist SIIC Environment Holdings jumped nearly 12 per cent or 2.5 cents to 23.5 cents with 108.3 million shares traded.

    Sino Construction, a building construction and civil engineering group, fell 8.1 per cent or 0.6 cent to 6.8 cents, with 115.1 million shares changing hands. China Everbright Water gained 7.5 per cent or 7.5 cents to $1.075, with 16.6 million shares traded.

    Meanwhile, SGX shares, which hit a five-year high of $8.63 on volume of 10.9 million shares on Tuesday, extended losses for a second session, slipping 1.6 per cent or 14 cents to $8.45 with 5.5 million shares traded.

    Responding to a query from the Monetary Authority of Singapore (MAS), SGX yesterday said it is "not currently in the process of establishing a link with China, but remains open to future collaborations which benefit our partners and shareholders".

    It refuted speculation mentioned in several media reports, after some brokerage houses issued reports about such a link.

    Oil-related counters Keppel Corp, SembMarine and Ezra Holdings rose on the back of higher crude prices. Brent crude futures rose above US$63 a barrel for the first time this year yesterday, although they dipped back to US$62.70 by late yesterday.

    Shares of Keppel Corp closed down 0.1 per cent, or one cent to $9.44, with 6.5 million shares traded. The rigbuilder released its first-quarter earnings after market close yesterday. SembMarine gained nearly 2 per cent or six cents to $3.13, with 8.2 million shares traded; while Ezra jumped 2.1 per cent or one cent to 48.5 cents, with 13.6 million shares changing hands.

    CMC Markets analyst Nicholas Teo said Keppel Corp's outlook is far from positive in a challenging operating environment.

    "With the price of crude settling at roughly half of where it was trading a year ago, if not less, Singapore rigbuilders have not managed to announce any new contracts of significance so far in 2015," Mr Teo said.

    "Further risks may reveal themselves in the form of contracts being pushed out or delayed, as rig owners contemplate a later delivery for the rigs they have ordered."