Aug 11, 2016

    Worries over oil, gas data dampen sentiment

    LOCAL shares eked out small gains yesterday amid concerns surrounding the oil and gas sector and expectations over key economic data.

    The benchmark Straits Times Index (STI) closed up 4.79 points or 0.17 per cent at 2,875.57 with the index dipping as low as 2,869.

    Turnover was 864.8 million shares worth $1.12 billion.

    The tepid day reflected mixed performances elsewhere. Shanghai was down 0.23 per cent while Hong Kong put on 0.12 per cent, as investors stayed cautious ahead of China's industrial production and retail sales data out this Friday. Tokyo shed 0.18 per cent.

    Investors were also waiting for signs from the energy sector such as the United States weekly petroleum status report last night, CMC Markets analyst Margaret Yang said.

    "The market is expecting a drop of 1.5 million barrels but the US government forecast earlier this week also hinted at increased output going forward. The inventory situation - and hence oil prices - will remain stressed," she added.

    "And that means the oil and gas stocks in Singapore will suffer. The segment, along with banks, has been a drag on the local market over the past 10 sessions or so since the Swiber news broke."

    Swiber Holdings announced its decision to wind up on July 28. It has since applied for judicial management.

    Reflecting those concerns, Sembcorp Marine was the top losing blue chip among the 12 STI component stocks that fell yesterday. It closed down two cents or 1.52 per cent at $1.30. Keppel Corp closed at $5.25.

    The fall in crude oil benchmark Brent futures to below US$45 a barrel overnight would not have helped the mood among investors.

    Outside the STI, the sell-off on Ezion Holdings and Ezra Holdings continued, with Ezion down two cents or 6.45 per cent to 29 cents. Ezra was off 0.3 cent or 6.52 per cent to 4.3 cents. The prospects of the two offshore marine support companies are now under close scrutiny after Swiber's demise.

    DBS and United Overseas Bank also fell amid uneasiness over their exposure to Swiber. DBS closed down six cents or 0.40 per cent at $14.98.

    UOB dropped one cent or 0.06 per cent to $18.05. OCBC was also down, paring one cent or 0.12 per cent to $8.48.