singapore shares end higher following the rebound in oil prices 87312015

Singapore’s December private home sales are the lowest seen since January 2009

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By :  ,  Financial Analyst

Singapore’s Straits Times Index (STI) ended 12.68 points higher or +0.38 per cent to 3,338.84, taking the year-to-date performance to -0.78 per cent. The FTSE ST Mid Cap Index gained +0.53 per cent, while the FTSE ST Small Cap Index declined -0.08 per cent. Singapore stocks were buoyed by a rise in the oil and gas sector following a sharp rebound overnight in oil prices.

The top performing FTSE ST sectors were oil and gas (+0.90 per cent), real estate holding and development (+0.92 per cent) and basic materials (+0.89 per cent). The losing sectors were led by technology (-3.15 per cent, consumer goods (-1.27 per cent) and the CataList index (-0.72 per cent).

According to figures released by Singapore’s Urban Redevelopment Authority on Thursday, developers sold only 230 private homes during December, usually a slow month on account of festivals and vacation time. This was down from the 423 units sold in November which was itself a very low figure, according to The Business Times. One reason for the poor sales at the tail end of 2014 is said to be developers postponing new launches and reducing marketing efforts pending finalisation of their strategies for 2015. Another reason, according to Alice Tan, head of Knight Frank’s Singapore research, is prevailing weak market sentiment as buyers continued to hold out for lower prices and newer, more attractive project launches.

Whatever the reason, December sales were the lowest seen since January 2009, when only 108 units were sold. For the year as a whole, sales were down to 7,557 units, down 50 per cent from the previous year’s 15,291 units, according to TODAY. This was the lowest annual sales figure since the 2008 financial crisis, when only 4,264 units sold. According to Mohamed Ismail, chief executive officer of real estate agency PropNex Realty, property sales will remain weak so long as the government’s cooling measures and the Total Debt Servicing Ratio frameworks remain in place.

Retail sales in Singapore jumped 6.5 per cent in November 2014 compared to November 2013, according to a statement released by the Department of Statistics, as reported by AsiaOne. However, this was far below analysts’ expectations of year-on-year growth of 7.0 per cent.

Ezra Holdings Limited (SGX:5DN) has put plans to list its subsea services unit in the United States on the backburner due to the unfavourable market conditions triggered by the crash in oil prices, said TODAY. “Given where the markets are, we have effectively put that on hold,” said Mr Eugene Cheng, group chief financial officer of Singapore-listed Ezra.

According to The MotorShip, Keppel Singmarine has won a contract worth US$265 million (SG$352 million) to build an ice-class, multipurpose vessel for Maritime Construction Services. Keppel Singmarine is the first Asian company to build icebreakers since 2006. Knut Reinertz, director of Maritime Construction Services said: “We are able to leverage our experience as operators and charterers, together with Keppel Singmarine's expertise and track record in the design and construction of ice-class vessels, to expand our service offerings with this kind of specialised vessel."

The Straits Times reports that shares in Indonesian mining company Resources Prima Group Ltd (SGX:5MM) slumped a massive 44.81 per cent to SG$0.101, and were down as much as 47.5 per cent at one point during the day. The crash prompted the Singapore exchange to seek clarification from the company regarding the unusual price and volume in the stock. The counter traded 105.7 million shares on Thursday, compared to just 18.2 million shares that changed hands on Wednesday.

DBS Group Holdings Ltd (SGX:D05) subsidiary DBS Bank has agreed with Postal Savings Bank of China and five other Chinese companies to set up a consumer finance company in China, to be named China Post Consumer Finance Company Ltd (CPCFC), according to the Straits Times. DBS Bank will be the second largest and only foreign shareholder in CPCFC and will invest SG$25.85 million for a 12 per cent stake.

Research analysts at Credit Suisse commenced coverage on recently listed Keppel DC REIT (SGX:AJBU), a data centre REIT, and have accorded it an outperform rating with a target price of SG$1.10 per unit. "Keppel DC Reit provides a unique exposure to the favourable industry fundamentals of the data centre market, which is still in its growth phase,'' Credit Suisse said, according to Business Times.

Find up to date information on the Straits Times Index at City Index.

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