singapores straits times index closes in the red but well off its lows 1443302015

Regional cues and a commodity slump weigh on the SGX.

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By :  ,  Financial Analyst

Singapore stocks ended a shade lower Tuesday, following the sharp overnight losses on Wall Street, and recurrent concerns about Chinese growth that pummelled the commodities sector. Regional bearishness also affected investor sentiment negatively. The benchmark indices for Shanghai, Tokyo and Hong Kong exchanges plunged 2.02 per cent, 4.05 per cent and 2.97 per cent respectively yesterday.

The benchmark Straits Times Index opened with a sharp downside gap and traded sideways until shortly after 1:00 PM, when a rally commenced and helped the index close near its best level of the day.

Unfortunately, the bulls were unable to push the index beyond the key 2,800 level.


The Straits Times Index (STI) ended 3.98 points or 0.14 per cent lower at 2,787.94, taking the year-to-date performance to -17.15 per cent.

The FTSE ST Mid Cap Index declined 0.66 per cent, while the FTSE ST Small Cap Index declined 0.32 per cent.

The Singapore Exchange traded a volume of 1,229.4 million shares valued at SG$1,282.7 million. Losers outnumbered gainers by 271/126.

Amongst the FTSE ST sectors, the gaining sectors included technology (+0.88 per cent), basic materials (+0.73 per cent), consumer services (+0.65 per cent), telecommunications (+0.63 per cent) and oil and gas (+0.06 per cent). Losing sectors included utilities (-1.99 per cent), China (-1.06 per cent), China Top Index (-0.93 per cent), industrials (-0.68 per cent) and fledgling (-0.43 per cent).


Shares in commodity Trader Noble Group Limited (SGX:N21) plunged 10.11 per cent to SG$0.400 following a sell-off in the global commodities sector on Chinese growth concerns, and the sharp fall in the shares of mining giant Glencore PLC (HKG:0805). Glencore was down 29.97 per cent to HK$8.60 yesterday on the Hong Kong exchange, though, on London, Glencore PLC (LON:GLEN) closed 12.30 per cent higher at GBX 77.06. Yesterday, Noble Group Limited (SGX:N21) fell to its lowest level since late 2008 and was the most actively traded counter on the Singapore exchange, according to Business Times.

HLH Group Ltd. (SGX:H27) closed unchanged at SG$0.012 yesterday. It said it had become the first Singaporean company to venture into public-housing projects in Cambodia through its launch of a residential development in the country’s port city of Sihanoukville. The mixed development project will be constructed on a land area of 9,818 square metres and will comprise 735 residential units as well as commercial space for a range of retail services, according to Channel News Asia.

Nightclub operator LifeBrandz Ltd (SGX:L20) plunged 25 per cent to SG$0.003. The company reported a full-year 2015 loss of SG$7.63 million, up sharply from the loss of SG$5.75 million in the previous year. The company said that it lost SG$1.8 million on discontinued businesses, and SG$1.16 million from continuing operations. However, revenue rose 8 per cent year-on-year to SG$1.26 million.

Huationg Global Ltd (SGX:41B) fell 10.87 per cent to SG$0.205. The civil engineering firm announced Tuesday the win of new civil engineering contracts worth SG$81.3 million by Huationg Contractor, its wholly-owned subsidiary.

Ezra Holdings Limited (SGX:5DN) was up 4.31 per cent to SG$0.121. According to the Business Times, Norway’s DNB Bank has acquired a 7.04 per cent stake in Ezra for SG$24.84 million in an off-market transaction of 207 million shares purchased at SG$0.12 each.

Economic news

The Hays Global Skills Index, which assesses the capacity of labour markets in 31 nations to supply skilled labour, noted that in 2015 wages of experienced, educated and technically proficient workers in Singapore are shooting up compared to those of low-skilled workers. "Growing technical skill shortages (and) government initiatives that endorse local Singaporean hires for middle-income jobs have exacerbated the shortage of talented locals, as the huge increase in overall wage pressure shows," said Ms Lynne Roeder, managing director of Hays in Singapore, as reported by the Straits Times.

Singapore’s business circles have welcomed the induction of Heng Swee Keat as Finance Minister and Tharman Shanmugaratnam as Coordinating Minister for Economic and Social Policies in the new Cabinet line-up announced Monday (September 28), according to Channel News Asia. Businessmen and financial experts said the appointments demonstrate the government’s priority on economic development by putting it in experienced hands.

According to a study by the government trade agency International Enterprise (IE) Singapore, the island-republic had most of the key attributes required to function as one of the world’s biggest commodity trading hubs, Channel News Asia said. Singapore had the necessary infrastructure in this regard, such as excellent banking, financial, insurance, shipping industry, talent pool, and regulatory framework.

A survey by American Express found that 83 per cent of chief financial officers at small and medium-sized enterprises (SMEs) were confident about the competitive position of the businesses today, but 67 per cent thought that there was a moderate to significant risk of failure during the next 3 to 5 years. “With the slowing economy, intense competition and tight manpower conditions; innovation is key for the survival of Singapore SMEs,” said Mr. Nigel Fox, Vice President and General Manager of Global Corporate Payments at American Express, as quoted by Channel News Asia. “Standing still or looking the other way won’t make the future go away.”

According to the Business Times, the Singapore dollar on Tuesday fell through SG$1.43 against the US dollar to a fresh six-year low, reflecting increased worries about global growth.

On Wall Street Tuesday, stocks managed to end in positive territory after a volatile trading session which reflected investors’ concerns regarding the health of the global economy. However, a last gasp rally late in the session helped to claw back some of the losses. The Dow Jones Industrial Average rose 0.3 percent to end with 16,049.13 points and the S&P 500 gained 0.12 percent to 1,884.09. The Nasdaq Composite dropped 0.59 percent to 4,517.32.

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