the sgx falls 0 4 per cent on greece worries 112822015

Investors focus on the Tiger Air turnaround and the Keppel companies’ transaction

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By :  ,  Financial Analyst

After its stellar performance last week, the SGX paused on Monday, clocking a marginal fall amidst eurozone tensions following the ascent of the leftist Syriza party in the Greek elections.

Indices and sectors

The Straits Times Index (STI) ended 12.98 points lower or -0.38 per cent to 3,398.52, taking the year-to-date performance to +0.99 per cent. The FTSE ST MiCap Index gained +0.97 per cent, while the FTSE ST Small Cap Index gained +0.15 per cent.

The SGX traded 1,413.5 million shares on Monday valued at SG$1,480.2 million. Losers outnumbered gainers by 262/204.

Amongst the FTSE ST sectors, the outperformers were basic materials (+3.08 per cent), real estate holding and development (+1.08 per cent), mid cap (+0.97 per cent) and China (+0.52 per cent). The only significant loser was maritime (-2.58 per cent).


The Singapore Exchange (SGX) has tied up with venture capital firm Clearbridge Accelerator for the development of an equity crowdfunding platform that will allow smaller firms and entrepreneurs in Singapore to raise funds, at the same time creating high-growth opportunities for investors, said TODAY.

According to the Straits Times, the facility will form a bridge between entrepreneurs and accredited investors such as private equity, corporate funds, institutions and family offices. Claimed to be the first of its kind in the world, it would allow investors to buy equity stakes in high-growth start-ups and small and medium enterprises, and store the shares in a central depository.

Tiger Airways Holdings Ltd (SGX:J7X) shot up 23.08 per cent to SG$0.32 after the budget carrier swung to a net quarterly profit after tax of SG$2.2 million in its fiscal third quarter, up from a loss SG$118.5 million in the same period last year, according to TODAY. Better yields and higher traffic volume pushed up total revenue by 5.9 per cent to SG$182.3 million. On the other hand, total expenses fell by 1.5 per cent to SG$178.2 million on account of lower fuel and staff costs, as well as lower capacity. The airline offloaded several overseas operations as a part of a major turnaround restructuring and made a rights issue. “We had to make some difficult decisions in the turnaround process,” said Mr Lee Lik Hsin, group chief executive of Tigerair. “Though we are not out of the woods yet, we are encouraged by the improving financial results.” The company is a subsidiary of Singapore Airlines Ltd (SGX:C6L).

OUE Commercial Real Estate Investment TR (SGX:TS0U) beat IPO estimates by 4.5 per cent when it reported a distribution of SG$45.9 million for the year to December 31, according to The Straits Times. This equates to a per unit distribution of 5.27 cents for the year.

Ascott Residence Trust (SGX:A68U) closed higher by 1.16 per cent to SG$1.30 after it secured contracts to manage three more properties with over 300 apartment units in Beijing and Hong Kong, according to ftn NEWS. Ascott is the largest international serviced residence owner-operator in China, with over 12,900 apartment units in 72 properties across 23 cities.

According to the Straits Times, analysts recommend that shareholders of Keppel Land Ltd (SGX:K17) would do well to accept parent company Keppel Corporation's (SGX:BN4) buyout offer of SG$4.38 per share, partly given the uncertain outlook for the property markets in Singapore and China, which form the core of Keppel Corp’s business. Shares in Keppel Land jumped 24.66 per cent to close at SG$4.55 yesterday, while those in Keppel Corp ended higher by 0.74 per cent at SG$8.16, in response to the buyout offer.

The offer by Southern Capital to buy all the shares of UE E&C Ltd (SGX:NI3) will end in two days’ time considering that the former has already acquired 81.15 per cent of UE’s share capital as of January 26, according to the Straits Times.

Hock Lian Seng Holdings Limited (SGX:J2T) announced that its wholly-owned subsidiary has won a contract worth SG$137.4 million from the Land Transport for the design and stabling of Gali Batu Depot.

The founders of Nico Steel Holdings Ltd (SGX:5GF) have sold a 28.38 per cent controlling stake in the company to Parot Tovot, an entrepreneur and private investor, said The Business Times.

Shares in China Yuanbang Property Holdings Ltd (SGX:B2X) slumped 14.7 per cent to SG$0.058 after the company announced that its chairman was being investigated by Chinese authorities and had resigned.

Economic news, currency and insight

According to data from the Economic Development Board, Singapore’s manufacturing output last month contracted by 1.9 per cent year-on-year amidst slowing global demand and low oil prices, said TODAY. Though this was the third monthly decline in manufacturing performance in the past four months, it was nevertheless better than consensus expectations of a decline of 3.9 per cent as measured by the median estimate from a Reuters’ survey of 13 economists.

Meanwhile, a survey by the Real Estate Developers Association of Singapore (REDAS) showed that its NUS-Redas Real Estate Sentiment Index fell to 3.4 in the fourth quarter from 3.7 in the third quarter, signifying that Singapore real estate developers continue to be gripped by expectations of worsening property market conditions. According to National University of Singapore Associate Professor Sing Tien Foo, market sentiment was adversely affected by the weak show in the residential sector of the market.

The euro plunged to an 11 year low against the US dollar yesterday after leftist, and anti-austerity party Syriza secured a landslide victory in the Greek general elections. The euro fell to a low of US$1.1088 at one point on fears that Greece may exit from the eurozone.

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