singapores sti nearly unchanged heading into a holiday weekend 1004932015

PwC gives a tick to Noble on its valuation practices on derivative contracts


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By :  ,  Financial Analyst

Investors and market participants kept a low profile on the week’s last day of trading on Thursday in view of the long four-day weekend, and the release of the US jobs report at a time when the SGX would be closed. Reflecting the caution, the Straits Times Index ended the day almost unchanged.

Meanwhile, Noble Group Limited (SGX:N21) was cleared by accounting firm PricewaterhouseCoopers regarding its valuation of derivative contracts. PwC said Noble complied with international requirements and standard industry practices in this regard.

Indices and sectors

The Straits Times Index (STI) ended a holiday-shortened week up by 2.19 points or 0.07 per cent higher at 3,193.58, taking the year-to-date performance to -5.10 per cent.

The FTSE ST Mid Cap Index gained 0.09 per cent, while the FTSE ST Small Cap Index declined 0.18 per cent.

The Singapore Exchange traded a volume of 1,468.5 million shares valued at SG$1,004 million. Losers outnumbered gainers by 261/193.

Amongst the FTSE ST sectors, the top gainers included healthcare (+0.90 per cent), utilities (+0.90 per cent), consumer goods (+0.89 per cent), industrials (+0.54 per cent) and consumer services (+0.39 per cent). Losing sectors included maritime (-1.21 per cent), oil and gas (-1.11 per cent), basic materials (-0.70 per cent), China (-0.47 per cent), CataList index (-0.43 per cent) and China top index (-0.24 per cent).

Stocks

According to PricewaterhouseCoopers, Noble Group Limited (SGX:N21) procedures for mark to market valuation for its long-term commodity derivative contracts comply with relevant accounting rules and industry practices, said the Business Times.

The company said net profit during the second quarter fell 4.5 per cent to US$60 million (SG$83 million) from US$66 million in the prior year period. Revenue fell 22 per cent to US$18.4 billion. The company attributed the decline in profit to “challenging business conditions,” and embarked on cost reduction measures to potentially yield US$70 million in annual cost savings. The company also announced on Thursday that it had fully redeemed US$735 million worth of bonds, its action demonstrating that it had no liquidity problems.

Global Logistic Properties Ltd (SGX:MC0) said yesterday that it planned to sell five wholly owned properties in Japan to GLP J-REIT for JPY38.1 billion (SG$0.42 billion) which is in line with the properties’ fair market value as of 30 June 2015. The properties comprise a total gross floor area of 203,000 square metres. “Following this transaction, GLP’s fund management platform will grow to US$27.4 billion,” the company said in a statement.

Economic news

Federal Reserve Bank of Atlanta President Dennis Lockhart said on Monday that the US Fed could raise short-term interest rates as soon as September because the economy was “approaching an acceptable normal,” according to the Wall Street Journal.

On Wall Street Monday, stocks closed higher on M&A news such as Berkshire Hathaway’s US$32 billion acquisition of Precision CastParts, and a rebound in oil prices. At the closing bell, the Dow Jones Industrial Average gained 242 points, or 1.4 per cent, to 17,615. The Nasdaq Composite rose 1.2 per cent to 5102, while the S&P 500 gained 1.3 per cent to 2104.

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