singapore stocks end lower friday as dollar strength and oil fears loom 328852015

Singapore stocks showed an improvement in market breadth on Friday as gainers outnumbered losing stocks, even though the main STI index trended lower.

The STI fell near its lows by noon and thereafter traded sideways for the rest of the session, barring a small rally in the last half-hour of the session.

Indices and sectors

The Straits Times Index (STI) ended 10.83 points lower or -0.32 per cent to 3,362.77, taking the year-to-date performance to -0.07 per cent. The FTSE ST Mid Cap Index gained +0.18 per cent, while the FTSE ST Small Cap Index gained +0.16 per cent.

The Singapore Exchange traded a volume of 1,110.6 million shares valued at SG$910.3 million. Gainers outnumbered losers by 215/192.

Amongst the FTSE ST sectors, the gainers were utilities (+1.67 per cent), basic materials (+0.86 per cent), telecommunications (+0.61 per cent) and real estate investment trusts (+0.45 per cent). The biggest losers were consumer goods (-1.43 per cent), consumer services (-0.71 per cent), China (-0.49 per cent) and industrials (-0.42 per cent).

Stocks

Sunright Limited (SGX:S71) was up 3.55 per cent to SG$0.175 and reported Friday that net profit for the second quarter ended January 31 rose to SG$1.8 million from SG$500,000 a year ago. Turnover was up 5 per cent to SG$70.7 million, driven by higher demand for its products and services, according to chief executive Sam Lim, as reported by Straits Times.

Shipbuilder Vard Holdings Ltd (SGX:MS7) slumped 1.89 per cent after it announced the termination of two shipbuilding contracts for a platform supply vessel after two affiliates of customer ER Offshore filed for insolvency in Germany, according to a report in Business Times. "The group does not expect to repay the prepayment received, and expects to be able to sell the vessels at a price that will cover the expected construction cost less the prepayment received," the company said.

Keppel Corporation Limited (SGX:BN4) announced Saturday that it owned 85.6 per cent of Keppel Land Ltd (SGX:K17), and was moving closer to the level of 95.5 per cent shareholding it required to take the subsidiary private.

Blumont Group Ltd (SGX:A33) has waived all the conditions of its offer for Genesis Resources Ltd. (ASX:GES) making the proposed takeover bid unconditional, according to a report in Business Times. Shareholders will therefore be issued shares in Blumont. Genesis is an Australian mining company with interests in gold, iron, manganese, uranium and base metals.

Economic news, currency and insight

This week, the US FOMC meeting is scheduled for Wednesday, March 18, and is likely to be a crucial indicator on the direction of US interest rates later this year. It is to be held at the time when the dollar index is powering to exceptional strength, creating apprehensions about money flows in economies, particularly emerging markets, around the world.

In reply to a question in Parliament regarding the lifting of property cooling measures, during the scrutiny of his Ministry’s budget, National Development Minister Khaw Boon Wan said, "The property market is in transition and it is a time that calls for vigilance and nimbleness. We will be careful," as quoted by Straits Times. Providing an update on housing affordability in Singapore, he said, that between 2009 and last year, prices of new flats in non-mature estates jumped 15 per cent without grants, or just 6 per cent with grants, while incomes grew much faster.

On Friday, Wall Street ended lower, pressured by falling oil prices and the strength in the US dollar which was crimping the profitability of American corporations with operations abroad. The Dow Jones Industrial Average was at 17,742.01, down 143.21 points (0.80 per cent), the S&P 500 fell 12.58 (0.61 per cent) to 2,053.37, while the Nasdaq Composite Index declined 21.33 (0.49 per cent) to 4,871.76.

According to a Bloomberg report, quoted by Straits Times, the global petroleum glut could be aggravated by oil refineries ramping up output and then scaling back their crude purchases once the market faces a glut of their end products. "Refiners may run very hard over the next few months, which is supportive for crude-oil balances near term, but they could flood product markets again," said Adam Longson, an analyst at Morgan Stanley in New York, indicating that oil prices could fall again.

According to another Bloomberg report, a team of senior executives from the US oil industry were in Washington last week lobbying for the White House and lawmakers to scrap the 40-year ban on US oil exports that was imposed after the 1973 Arab oil embargo. An attractive differential of US$10 exists between international crude prices and the US, and the lifting of the ban would allow for these producers to take advantage of the higher prices abroad.