Nov 21, 2013

    All eyes on Fed meet as STI dips again

    The Straits Times

    SINGAPORE shares dipped for the second straight session as cautious investors awaited developments in the United States last night.

    The wary sentiment amid a lack of new directions left the benchmark Straits Times Index (STI) down 7.85 points, or 0.25 per cent, to 3,184.23. Trading volumes remained muted, with 1.3 billion shares worth $742.8 million changing hands.

    One keenly watched piece of market news will be if the minutes of the US Federal Reserve's meeting give further hints of when the central bank will cut back on its massive stimulus.

    There is also the release of last month's US retail numbers, which will also be monitored closely, as some analysts have tipped that sales may be soft going into the holiday season.

    CMC Markets analyst Desmond Chua said: "We doubt that more hawkish-sounding Fed minutes will have any imminent effect on equities, leaving data to determine (market) direction."

    Major regional bourses finished mainly weaker, with Japan down 0.33 per cent, South Korea 0.71 per cent behind and Australia 0.85 per cent back.

    But Hong Kong edged up 0.18 per cent, while Shanghai added 0.62 per cent.

    Here, 14 of the 30 STI component counters ended lower, with 12 gainers and four unchanged.

    The losers included palm-oil giants Wilmar International, down 10 cents to $3.52, and Golden Agri-Resources, which closed a cent back at 58.5 cents.

    UOB Kay Hian kept its overweight call on the palm-oil sector, noting that the crude-palm-oil price is expected "to gain upside momentum on easing concerns over high inventory, slower production and stable demand".

    Bank stocks ended mixed, with DBS Group Holdings edging up four cents to $16.99 and United Overseas Bank adding six cents to $21.07, but OCBC Bank shedding four cents to $10.40.

    Property counters were in decline, with CapitaLand four cents down to $3.06 and City Developments 13 cents back at $10.11, even as a draft master plan for the city was unveiled.

    KLW Holdings was the most active stock, with 115.4 million units done as it shed 0.1 cent to 3.1 cents.

    DBS Group Research noted in a strategy report yesterday that various factors should spur interest in Asian equities: China's economy stabilising, Europe bottoming with upside for recovery, attractive relative valuation and the Fed possibly further delaying tapering beyond next March.

    It tips bank stocks as a proxy to Singapore's economic recovery, with OCBC as its pick for its "strong banking operations, asset quality and regional exposure".