singapore stocks drift downwards as investors wait out the fed rate decision 1303002015

Singapore stocks belied expectations of a post-election, ‘feel-good’ rally on Monday (September 14) and instead lost ground as investors worried about the likelihood of an interest rate “liftoff” by the US Fed at its meeting later this week. Also aiding the bears was fresh data out of China that emphasised the slowdown in the country’s economy and triggered a sell-off on regional stock exchanges.

Indices and sectors

The Straits Times Index (STI) ended 16.56 points or 0.57 per cent lower to 2871.47, taking the year-to-date performance to -14.67 per cent.

The FTSE ST Mid Cap Index declined 0.36 per cent, while the FTSE ST Small Cap Index rose 0.02 per cent.

The Singapore Exchange traded a volume of 1242.1 million shares valued at SG$856.5 million. Losers outnumbered gainers by 231/173.

Amongst the FTSE ST sectors, the losing sectors included technology (-2.13 per cent), CataList index (-1.94 per cent), industrials (-1.80 per cent), oil and gas (-1.21 per cent), and basic materials (-0.91 per cent). Sectors which gained included maritime (+1.48 per cent), consumer goods (+0.77 per cent), China (+0.70 per cent), China top index (+0.40 per cent) and telecom (+0.10 per cent).

Stocks

SuperBowl Jurong, a property which was at one time in the portfolio of real estate group Hiap Hoe Ltd (SGX:5JK), is up for sale, according to Channel News Asia. The 111,000 square foot entertainment complex, which boasts of tenants such as SuperBowl bowling alley, Sheng Siong supermarket, and McDonald's and Subway dining outlets, has a 99.6 per cent occupancy rate according to Colliers International.

Retailer and property group Metro Holdings Limited (SGX:M01) said it intends to close its City Square Mall store on the expiry of its lease at the end of this year. The 56,000 square foot store has been located inside the City Square Mall in Little India since 2009. "Metro's lease (at the mall) will expire (at the end of) December and the move is part of our plans to consolidate resources in light of difficult trading conditions," a Metro spokesman said, according to AsiaOne.

Punj Lloyd Pte Ltd and Sembawang Engineering and Constructors, two subsidiaries of Indian engineering and construction group Punj Lloyd Limited (NSE:PUNJLLOYD), have sought approval from the Singapore High Court to enter into a scheme of arrangement with creditors in a bid “to overcome the current short-term financial constraint on account of losses suffered in its projects.” The Straits Times said the development was linked to the slump in oil prices.

DBS Group Holdings Ltd (SGX:D05) said Monday that it intends to wind down its Singapore-based Islamic banking joint-venture and will handle Shariah-compliant products directly, according to Channel News Asia. "After much consideration, the board of directors of The Islamic Bank of Asia Ltd (IB Asia) has unanimously agreed to progressively wind down IB Asia. As a separate legal entity, IB Asia is unable to achieve economies of scale," DBS said in a filing.

SembCorp Industries Limited (SGX:U96) said yesterday that its US$1.5 billion Thermal Powertech Corporation India (TPCIL) power project in India had successfully commenced full commercial operations following the completion of its second and final 660-megawatt unit on Monday.

Economic news

The International Shipping Centre Development Index, which tracks the performances of 46 major ports, placed Singapore at the top spot for the second year in a row. The index is compiled based on evaluations of the ports under the categories of maritime services, business environment and port conditions. Singapore, along with runners-up London and Hong Kong, was cited as leaders owing to their large port facilities and comprehensive maritime business service sectors.

Channel News Asia reported that the three month Singapore Interbank Offered Rate (SIBOR) rose Monday to 1.13100 per cent, up from 1.07483 per cent on Thursday, and reaching its highest level since 2008. The SIBOR is Singapore’s key mortgage benchmark and is likely moving up in anticipation of an interest rate hike by the US Fed later this week.

In a telephone interview with the Business Times, Andrew Colquhoun, head of Asia Pacific sovereigns at Fitch Ratings, said the island republic was not at risk of losing its top-notch AAA credit rating, even though it faced longer term pressures similar to those at other advanced economies.

On Wall Street on Monday, stocks ended lower as investors worried about fresh growth concerns out of China and the looming US Federal Reserve meeting later this week that could implement an interest rate hike for the first time after 2006. The Dow Jones Industrial Average fell 87.47 points, or 0.53 percent, to 16,345.62, the S&P 500 lost 11.04 points, or 0.56 percent, to 1,950.01 and the Nasdaq Composite dropped 26.39 points, or 0.55 percent, to 4,795.95.