Singapore stocks had a down day following the sharp overnight losses on Wall Street due to rate worries. Commodity stocks such as Noble, Golden Agri, and Wilmar dominated the list of declining stocks on the STI. It was the third successive losing day for the STI and the broad market showed a very high ratio of losing stocks compared to those gaining, underlining market-wide weakness.
Indices and sectors
The Straits Times Index (STI) ended 19.67 points lower or -0.58 per cent to 3,378.59, taking the year-to-date performance to +0.40 per cent. The FTSE ST Mid Cap Index declined -0.80 per cent, while the FTSE ST Small Cap Index declined -0.76 per cent.
The Singapore Exchange traded a sharply higher volume of 1,357.8 million shares valued at SG$1,215 million. Losers outnumbered gainers by 309/114.
Amongst the FTSE ST sectors, the only gainers were utilities (+0.12 per cent) and real estate (+0.08). The biggest losers were technology (-2.11 per cent), consumer goods (-1.09 per cent), industrials (-1.01 per cent) and real estate investment trusts (-1.00 per cent).
Stocks
Shares in Noble Group Ltd (SGX:N21) plunged 1.6 per cent to SG$0.92. The stock was amongst the biggest losers on the STI yesterday and fell to a 17-month low. According to a report in the Business Times, Richard Elman, chairman of Noble, has upped his stake in the company from 20.926 per cent to 20.956 per cent, a filing on Wednesday showed. Noble ranks as one of Asia’s biggest commodity trading firms and its stock is still reeling from the controversy surrounding allegations of aggressive accounting at the company by little-known Iceberg Research.
Real estate solutions provider Boustead Projects, a subsidiary of Boustead Singapore Ltd (SGX:F9D), has been appointed as the developer for GlaxoSmithKline’s new Asian headquarters to be built in Singapore, according to the Straits Times.
SembCorp Industries Ltd (SGX:U96) has denied reports appearing in the Indian media that it was negotiating to acquire a 1,440 megawatts power plant in Odisha, India, from the GMR group, said the Straits Times.
Offshore marine engineering company Nam Cheong Ltd (SGX:N4E) announced it had secured contracts for the sale of two vessels of an aggregate value of US$58 million (SG$80.3 million). It will build a 200-man Accommodation Work Vessel for Marco Polo Marine, an integrated offshore supply and marine logistics group, according to a report in Straits Times. It will also build a 12,000 BHP Anchor Handling Towing Supply Vessel for a repeat customer – Dubai-based Topaz Energy and Marine Ltd – a leading marine solutions provider to the global energy industry.
Del Monte Pacific Ltd (SGX:D03) was down 3.12 per cent to SG$0.310 after the company reported a US$2.2 million net loss in its third quarter ended January 31, 2015, compared to a net loss of US$6.4 million in the year prior quarter, said the Straits Times. For the nine months ended January 31, the company has swung to a net loss of US$23.9 million from the year prior profit of US$6.5 million. The quarterly net loss was mainly due to acquisition expenses and higher interest costs related to the company’s acquisition of Del Monte Foods in the US.
Electronics components distributor WE Holdings Ltd (SGX:5RJ) has agreed to buy out marine sand supplier Hua Kai for SG$25 million, and will finance the same through an equally sized convertible bond offering, according to Deal Street Asia. The company will pay SG$8 million in cash and SG$2 million in shares, while the balance of SG$15 million would be paid over a three-year earn-out period depending on net profit performance during 2016, 2017 and 2018 fiscal years. Terence Tea, executive chairman and managing director of WE Holdings, said: “The proposed acquisition is in line with the company’s intention to expand our commodities business and we are also exploring opportunities presented by the cement, oil and gas and petroleum sectors in Myanmar. To date, we have successfully gained a foothold across different spheres of the commodities sector in the region and are ready to ride on growth opportunities as they unfold.”
A research report by Credit Suisse said current valuations of S-REITS were expensive, and that investors should wait for a capital flight from this sector in the event of interest-rate related volatility or a return to a risk-on mode, says an article in Business Times.
Economic news, currency and insight
According to economists, the Monetary Authority of Singapore (MAS) is unlikely to take any steps at its scheduled policy meeting next month to further slowdown the appreciation of the Singapore dollar, despite concerns of slowing economic growth, says a report in Straits Times. "We do not expect any further easing in April, as we think such a move could worsen the already high living and business costs in Singapore," said Barclays economist Leong Wai Ho. Regarding concerns on slow growth, he said this was not yet a “crisis” warranting currency intervention by the MAS, and that the booster from low oil prices would likely kick in from the second half of this year.
The proportion of applicants for public rental housing that were former home owners has risen to 59 per cent from just 52 per cent five years ago, according to an article in TODAY. Though these applicants may have had to sell their flats for various reasons, Dr Mohamad Maliki Osman, Minister of State (National Development), who was speaking in Parliament yesterday, said: “My advice (is) resist the temptation and don’t cash out. Keep your home, protect your nest egg. Life may be harder in the short run, but it will work out.”
Rentals for private condominiums and apartments fell 0.8 per cent in February with fewer units being leased out, according to estimates by SRX Property reported in the Straits Times. This means rents are again on a 12-month downward trajectory following a brief pause in January when they remain unchanged.
Wall Street suffered losses again in overnight trade due to rate hike worries and the rapidly growing strength of the US dollar. The Dow Jones Industrial Average dropped 27.55 points (0.16 per cent) to 17,635.39, the S&P 500 shed 3.92 (0.19 per cent) at 2,040.24, while the Nasdaq Composite Index lost 9.85 (0.20 per cent) at 4,849.94.
