Dec 04, 2013

    STI ends almost flat in listless trading

    The Straits Times

    THE local bourse endured a listless trading day following Wall Street's discouraging overnight performance and the absence of clear market directions.

    As is becoming common, upbeat data out of the United States merely cemented fears that the Federal Reserve will dial back the stimulus plan soon.

    "As the Fed had left no other clues besides the decision to taper being totally data-dependent, Monday's surprisingly upbeat economic data was met with a decline in US stock markets and a rise in treasury yields, which led to an advance in the dollar," said CMC Markets analyst Desmond Chua.

    The downbeat mood left the benchmark Straits Times Index down just 1.09 points, or 0.03 per cent, to 3,187.67, with only 1.35 billion shares worth $760.3 million changing hands.

    Other Asian markets closed mixed: Japan's Nikkei 225 rose 0.6 per cent, but the Hang Seng fell 0.53 per cent in Hong Kong.

    The Dow slipped 0.5 per cent on Monday night, while the S&P 500 lost 0.3 per cent.

    CIMB Research noted in a strategy report on Singapore for 2014 that after five years of a rally built on quantitative easing, "one has to be edgy on how an end to QE will change the game".

    But it said the timing of the tapering does not matter from a stock-selection perspective. "The way markets work is that until interest rates actually normalise (after the tapering), investors will anticipate the event and interest-rate-sensitive sectors in Singapore will not do well."

    In short, property stocks and real-estate investment trusts are expected to underperform until after interest rates rise.

    The FTSE ST Reit Index lost 4.44 points yesterday to 719.22.

    Across the board, losers outpaced gainers 214 to 151, while 431 counters were unchanged.

    Albedo was the most actively traded, with 144 million shares worth nearly $7 million. The counter gained 0.2 cent, or 4.4 per cent, to 4.7 cents.

    Blumont Group fell one cent, or 9.4 per cent, to 9.7 cents, weighed down by news that it is being sued by Australian-listed Prospect Resources for scrapping a deal to buy a stake in the firm.

    Liongold, another of the three penny stocks that plunged in October, lost 0.8 cent, or nearly 5 per cent, to 16.8 cents. Asiasons Capital, the third, shed 1.1 cents, or 8.3 per cent, to 12.2 cents.

    Golden Agri-Resources led the losses, falling one cent, or 1.7 per cent, to 57.5 cents, followed by Hongkong Land Holdings, which retreated 10 US cents, or 1.7 per cent, to US$5.77.