Dec 05, 2013

    STI slips as edgy Asia awaits US data

    THE local market remained something of a dead zone, with nervy investors sitting it out until United States jobs data is released late tomorrow.

    But the lack of action - only 1.9 billion shares worth $960.6 million changed - failed to prevent the benchmark Straits Times Index (STI) from slipping 26.97 points, or 0.85 per cent, to 3,160.7.

    The mood was similarly edgy across Asia, with broad-based declines among regional bourses.

    Hong Kong declined 0.76 per cent, Tokyo fell 2.17 per cent and Seoul dropped 1.12 per cent.

    Shanghai, however, rose 1.31 per cent to a three-month high after the central bank said it plans to reform the Shanghai free-trade zone within three months.

    All eyes remain on the US, with analysts expecting the job numbers to signal when the Federal Reserve might start scaling back its bond-buying programme.

    "My gut feeling is that we will probably get a reasonably positive set of jobs figures come Friday, and if anything that might just heighten fears that we could see a December taper," said Hargreaves Lansdown equity analyst Keith Bowman in an interview with Reuters. "We should still get a little bit of downside."

    The lacklustre session here saw only two out of the 30 STI constituents ending the day in positive territory.

    Singapore Airlines added a cent to $10.54 and SIA Engineering gained three cents to $4.86.

    Two others were unchanged - DBS Bank at $17 and Thai Beverage at 48 cents.

    Courts Asia retreated 2.5 cents to 65 cents after Maybank Kim Eng Research slashed its rating on the stock to "sell".

    "Courts Asia is mired in a highly competitive market, with scant opportunities for price or cost leadership," wrote analyst James Koh in a note yesterday.

    "Stripping out customer credit income, operating margins for the group have historically been negative, a sign of the intense competition. We believe the company may not be able to pass on cost pressures, including a 6 per cent goods and services tax in Malaysia down the road in 2015."

    Analysts have begun issuing forecasts for next year, with many tipping a good year ahead for stock markets. Schroders' lead portfolio manager of global and international equities, Mr Simon Webber, noted earlier this week that he believes the year will benefit stock pickers.

    "Since the 2008 market crash, financial markets have been buffeted by macroeconomic events... However, as the growth and policy environment begins to normalise, markets will naturally lengthen their investment horizon and should therefore increasingly focus on companies' long-term growth prospects."