Mar 12, 2015

    Strong greenback, Fed fears dampen STI

    CONCERNS over tighter liquidity as the greenback continues to strengthen amid talk of an earlier United States interest rate hike drove shares here deeper into the red.

    A negative Wall Street lead also weighed on the market.

    The key Straits Times Index sank 19.67 points to 3,378.59, with new support levels seen at 3,370-3,375 ahead of further cues from the Federal Open Market Committee meeting next week. Some 1.33 billion shares worth $1.13 billion changed hands.

    Jardine C&C closed 3.8 per cent or $1.61 lower at $41.02; Jardine Strategic slipped 1.9 per cent or 66 US cents to US$34.70; while Jardine Matheson dipped nearly 1 per cent or 62 US cents to US$64.38.

    Banking counters are being weighed down by fears that the sell-off in Singapore dollars in favour of the US dollar may tighten liquidity here and lead to higher borrowing costs, which could in turn dampen business activity, Phillip Futures investment analyst Howie Lee said.

    DBS Group Holdings closed 0.7 per cent or 13 cents lower at $19.59, with 3.7 million shares traded; while United Overseas Bank fell 0.7 per cent or 16 cents to $22.64, with 2.6 million shares changing hands.

    "The market is in a correction phase, Noble is still under attack, Genting Singapore is still dropping, and with crude prices still weak, Keppel Corp and Sembcorp Marine will likely remain under pressure," remisier Alvin Yong said.

    "A strong US dollar is bad for equities markets, as investors tend to sell shares and buy and hold US dollars."

    Across the region, Malaysia shed 0.11 per cent, while Hong Kong's Hang Seng fell 0.75 per cent. Shanghai gained 0.2 per cent and Japan rose 0.5 per cent.

    Meanwhile, in Singapore, Noble Group fell to a 17-month low of 92 cents a share, down 1.6 per cent or 1.5 cents, on weak sentiment following weaker-than-expected fourth-quarter results and criticism over alleged accounting malpractices. Some 79 million shares changed hands.

    Moya Asia gained 4.1 per cent or 0.2 cent to 5.1 cents, with 48.6 million shares traded. On Feb 25, the water treatment firm announced the entry of an Indonesian party which is buying into Moya at eight cents a share and will end up owning 29 per cent of the company.

    Darco Water Technologies got hit with a trading query from the Singapore Exchange (SGX) after its stock spiked up 29 per cent or 0.7 cent to 3.1 cents. Some 41.4 million shares changed hands.

    Thye Kim Meng, Darco's managing director and chief executive, told SGX yesterday that the company is "continuously engaged in discussions with various parties on potential projects and business opportunities".