Nov 20, 2013

    STI slides as investors lock in gains

    The Straits Times

    SINGAPORE stocks snapped a three-session winning streak yesterday, amid mild regional weakness.

    Investors used an absence of strong leads to lock in gains, sending the benchmark Straits Times Index (STI) sliding 10.95 points, or 0.34 per cent, to 3,192.08.

    Trading volumes remained lacklustre, with just 1.66 billion shares worth $839.1 million changing hands.

    Analysts say the feel-good factors from China's pledge to execute economic reforms and United States Federal Reserve chairman-nominee Janet Yellen's comments that she would continue US stimulus have eased.

    The above reasons have combined to propel Asian stocks to their best three-day streak since July.

    "Attention will likely focus on the release of the minutes from the Fed's October meeting on Wednesday for further guidance on the chance of a December tapering," said AMP Capital Investors' head of investment strategy and chief economist, Mr Shane Oliver.

    Key regional markets finished mixed, with Japan shedding 0.25 per cent and Hong Kong nearly flat, off 0.01 per cent. But South Korea climbed 1.04 per cent.

    Back home, 16 of the 30 STI component counters finished lower, with 13 gainers and one unchanged.

    Commodity-related counters finished mixed, with Wilmar International up nine cents to $3.62 after Bank of America Merrill Lynch upgraded its call to "buy" and raised its target price from $3.90 to $5.

    The more bullish call was triggered by a recent call for tender by Indonesia's state oil company Pertamina to buy three million tonnes of biodiesel next year.

    Olam International added half a cent to $1.545, but Noble Group dipped a cent to $1.065 and Golden Agri-Resources fell 1.5 cents to 59.5 cents.

    Blumont was again in the spotlight after announcing that its non-executive independent director Ng Su Ling had quit due to other commitments. It eased 0.1 cent to 11.5 cents.

    The day's most active counter was SingHaiyi, which dipped 0.1 cent to 2.2 cents with 125.7 million units done.

    CIMB noted in a Singapore strategy report yesterday that the recent third-quarter results season here was "soft".

    It added: "Earnings dampeners included competition, weak selling prices, slower sales and lower translated earnings from overseas."

    But it also noted that rising costs did not seem to be too much of a problem, and that the bright spots were higher rentals and good execution.