banks and other blue chips fall on the singapore exchange 252602015

Singapore stocks ended nearly half a percent lower following losses in the three biggest banks, and blue chips such as ComfortDelGro and SingTel.

Sentiment was also weighed under by the renewed allegations of accounting irregularities at Noble Group Ltd (SGX:N21) by Iceberg Research, and the trading halt requested by the company thereafter.

Indices and sectors

The Straits Times Index (STI) ended 14.65 points lower or -0.43 per cent to 3,426.18, taking the year-to-date performance to +1.81 per cent. The FTSE ST Mid Cap Index declined -0.31 per cent, while the FTSE ST Small Cap Index declined -0.29 per cent.

The Singapore Exchange traded a sharply higher volume of 1,127.3 million shares valued at SG$946.2 million.

Amongst the FTSE ST sectors, the only gainers were consumer goods (+0.77 per cent), Catalist (+0.25 per cent) and oil and gas (+0.230 per cent). The top losers were maritime (-1.35 per cent), basic materials (-1.27 per cent), fledgling (-1.01 per cent) and industrials (-0.77 per cent).

Stocks

Noble Group claims to have identified the person behind Iceberg Research as a former disgruntled employee whom they fired about 18 months ago. "We have a high degree of confidence we know who it is," said Noble chief executive Yusuf Alireza. "We don't plan to spend any management time on it or shareholders' resources on it… Our stakeholders will judge us not by an anonymous blogger but by our results, and that's what we want to focus on." The company has handed the information over to the regulators and does not intend to take any legal action against the person.

For the three months ended December 31 the company reported a net quarterly loss of US$240 million (SG$326 million), the first loss since September 2011, compared to a profit of US$170 million a year ago. Revenue during the period slumped 14 per cent to US$21 billion.

Iceberg Research, meanwhile released a second report on Thursday pointing to a “divergence” between the net profit declared by Noble and its operating cash flow, primarily due to Noble allegedly overstating the fair value of its long-term contracts. The charges were dismissed by Noble as “factually incorrect.” Iceberg Research may soon release a third report on the company’s debt levels and its credit rating. Noble Group's stock was suspended for trading on Thursday morning and will resume trading on Friday according to the Business Times. Meanwhile, Noble’s auditors, Ernst & Young have requested more time to review their own internal processes before signing off on the group’s annual accounts, said the Business Times.

Rickmers Maritime (SGX:B1ZU) reported a net loss of US$16 million for the 12 months ended December 31, swinging from a net profit of US$23.5 million the year ago, primarily due to impairment losses amounting to US$63 million, said the Straits Times.

Hong Leong Finance Ltd (SGX:S41) said net profit for the full year ended December 31 fell 10.4 per cent to SG$62.8 million due to a general provision charge and lower non-interest income. However, net interest income improved to 0.5 per cent to SG$149 million.

Thai Beverage Public Company Ltd (SGX:Y92) gained 0.71 per cent to SG$0.710 after net profit for the full year ended December 31 jumped 13 per cent to 21.7 billion baht (SG$904 million) and revenue improved 4 per cent to 162 million baht owing to better sales in its alcohol business. The company said that small and medium enterprises faced uncertainties and challenges and may need to restructure in the current environment.

Banyan Tree Holdings Ltd (SGX:B58) reported Thursday that net profit in the fourth quarter ended December 31 rose 13 per cent to SG$4.13 million compared to the year prior period driven by a gain on revaluation of investment properties in the Seychelles. However, revenue for the quarter fell 6 per cent to SG$91.83 million following a weak Russian market and lower receipt of architectural and design fees from Chinese projects, according to the Straits Times.

Yeo Hiap Seng Ltd (SGX:Y03) said net profit during the three months ended December 31 was down 22 per cent from SG$17.1 million to SG$13.3 million due to a weak performance from the property division and lower revaluation gains on investment properties, according to The Business Times.

Centurion Corp Ltd (SGX:OU8) said Thursday its net profit during the quarter ended December 31 surged to SG$72.97 from SG$26.94 a year ago, driven by fair value gains on its investment properties. For the full year 2014, net profit rose 21 per cent, to SG$111.20 million, while revenue was up 48 per cent at SG$84.44 million.

Economic news, currency and insight

According to data released by the Economic Development Board, Singapore’s factory output rose 0.9 per cent in January compared to the corresponding period last year, and turned around from the 1.9 per cent fall seen in December. However the data print was far lower than the rise of 3.7 per cent as expected by economists, according to TODAY. “Output was expected to be higher because of the low base effect from a year ago, when Lunar New Year was in January, as businesses will usually stock up a month before the festive period,” said Mr Michael Wan, an economist at Credit Suisse.

Global ratings agency S&P has given its stamp of approval on Singapore’s 2015 budget, according to AsiaOne. S&P affirmed Singapore's sovereign credit strength with a top AAA unsolicited rating and a "stable" outlook, observing that the latest national financial report showed the strength of the Government’s "institutional and governance effectiveness."