Apr 30, 2014

    STI slips as traders await US, China data

    SINGAPORE shares drifted lower yesterday, as traders exercised caution ahead of the release of key United States and China economic data this week.

    The benchmark Straits Times Index slipped 4.97 points to close at 3,237.74.

    Leading laggards United Overseas Bank and Wilmar International - both STI components - took heavy hits.

    UOB, due to release its first-quarter results today, shed 4.34 per cent, or 96 cents, to $21.18 after reaching its ex-dividend date, prompting a sell-off. Nearly five million shares changed hands.

    The other two banks, OCBC and DBS Group Holdings, both due to release their results today, fared slightly better.

    OCBC inched up 0.2 per cent, or two cents, to $9.47 a share, with 3.82 million shares changing hands. DBS added 0.7 per cent, or 12 cents, to $16.84 a share, with 2.8 million shares done.

    Shares of Wilmar extended losses, shedding 2.58 per cent, or nine cents, to $3.40 after Australian company Goodman Fielder spurned a A$1.3 billion (S$1.5 billion) takeover bid from Wilmar and First Pacific, saying it "materially undervalues" the company. Some 27.4 million Wilmar shares changed hands.

    Shares of STI heavyweight Jardine Cycle & Carriage also suffered heavy losses, dipping 2 per cent, or 96 cents, to $46.54, with 465,000 shares changing hands.

    Shipbuilder Vard Holdings dropped 3.5 per cent, or 3.5 cents, to 95.5 cents, after the company reported a 51 per cent slump in its first-quarter net profit, as lower revenue and higher costs squeezed margins.

    Net profit fell 51 per cent to 92 million Norwegian kroner (S$19.2 million) in the first three months this year. Revenue slipped 2.7 per cent in the same period to 2.7 billion kroner.

    "Local investors are shifting to more defensive sectors like telcos from financials and consumer discretionary stocks such as Noble. They are positioning ahead of US gross domestic product (GDP) data and the (Federal Reserve's) Federal Open Market Committee meeting this week," said Desmond Chua of CMC Markets.

    StarHub shares edged up nearly 1 per cent, or four cents, to $4.14, while SingTel shares rose 0.3 per cent, or one cent, to $3.78.

    This week, the US will release its first quarter GDP numbers and key labour market report for April on non-farm payrolls, which is expected to give an indication on the health of the world's No. 1 economy. The Federal Reserve is also expected to continue tapering the bond-buying stimulus programme.

    Friday will also see the release of surveys of global manufacturing activity, with the main spotlight on China amid hopes for signs that a recent slowdown in the world's second-biggest economy has bottomed out.