singapore stocks on the back foot as china growth worries return 1570622015

Singapore stocks ended sharply lower Tuesday in response to disappointing external trade data from China, mixed guidance on the interest rate hike by various Fed functionaries and the looming possibility that Singapore might soon slip into a technical recession.

Indices

The Straits Times Index (STI) ended 47.23 points or 1.56 per cent lower at 2,984.88, taking the year-to-date performance to -11.30 per cent.

The FTSE ST Mid Cap Index declined 1.33 per cent, while the FTSE ST Small Cap Index declined 1.37 per cent.

The Singapore Exchange traded a volume of 1,315.4 million shares valued at SG$1,128.2 million. Gainers outnumbered losers by 299/127.

Amongst the FTSE ST sectors, the biggest losing sectors included oil and gas (-3.50 per cent), technology (-2.34 per cent), basic materials (-2.13 percent), telecommunications (-1.52 per cent), consumer services (-1.51 per cent), Catalist index (-1.23 per cent) and financials (-1.08 per cent). There were no gaining sectors.

Stocks

Shares in Lian Beng Group Ltd (SGX:L03) fell nearly 2 per cent to SG$0.510. For the first quarter ended August 31 the developer reported net profit of SG$32.3 million, up 169.5 per cent, on revenue of SG$135.6 million, which was down 19.1 per cent. The quarterly performance was attributable mostly to a higher share of profits from associates and joint ventures, according to the Straits Times.

First Real Estate Investment Trust (SGX:AW9U) was down 0.37 per cent to SG$1.34. The distribution per unit (DPU) for the third quarter ended September 30 was up 3 per cent from 2.02 Singapore cents in the prior year period to 2.08 Singapore cents. While income available for distribution jumped 6.2 per cent to SG$15.6 million, net property income was up 6.8 per cent to SG$25 million. Gross revenues were higher by 6.1 per cent at SG$25.3 million. DPU rose because of higher rentals from the acquisition of a hospital last year as well as improved contributions from Indonesia and Singapore, according to the Straits Times.

According to a report in the Straits Times, Noble Group Limited (SGX:N21) has been reducing its stockpiles of base metals including large holdings of aluminium in an effort to free up cash, and to concentrate on its traditional strengths such as trading in alumina and aluminium. The group has suffered a series of high-profile executive departures in recent times. Shares in the company were down nearly 9 per cent to SG$0.470.

Shares in Singapore Press Holdings Limited (SGX:T39) were up 0.25 per cent to SG$4.00. The company publishes the Straits Times and Business Times newspapers. The company suffered a 20.4 per cent drop in net profit for the full year ended August 31, 2015 to SG$321.7 million, while operating revenue fell SG$1.18 billion. Profitability was affected by a decline in advertising revenue, though revenues from property rose 12.6 per cent.

Economic news

Singapore’s economic growth numbers for the third quarter are due out today, and according to most economists, will likely show that the island republic suffered a mild technical recession. The Monetary Authority of Singapore will also conduct its monetary policy meeting today, and many analysts expect the central bank to ease down the Singapore dollar.

Flash estimates released yesterday by SRX Property showed that resale prices of private apartments declined 0.1 per cent in September compared to August, and are down about 1.2 per cent year-on-year. A total of 446 non-landed private homes were resold in September, down 10.6 per cent compared to the 499 units resold in August. On a year-on-year basis, resale volume was down 4.7 per cent from the 468 units resold in September 2014, according to Channel News Asia.

Data out of China showed that during September the country’s imports dropped 20.4 per cent year-on-year, their 11th consecutive decline, while exports slipped 3.7 per cent. "Import growth remained sluggish, suggesting weakening domestic demand, particularly investment demand," said Mr Yang Zhao, China economist at Nomura Holdings in Hong Kong, and quoted by the Straits Times. "We maintain our view that GDP growth will decline to 6.7 per cent in the third quarter."

Shares in CapitaLand Limited (SGX:C31) dipped 2.88 per cent to SG$3.04. According to the Straits Times, the company, which had tied up with Norway’s sovereign wealth fund to bid for Blackrock’s Asia Square Tower I, has emerged as the preferred bidder and will now open exclusive discussions with Blackrock. The 43-story tower is plagued by declining rents and occupancy, and market watchers value the property at approximately SG$3.5 billion.

On Wall Street Tuesday, stocks closed moderately lower due to a sell-off in the pharma sector, and fresh worries about Chinese growth after the country released disappointing external trade numbers. The Dow Jones Industrial Average finished down 49.97 points (0.29 per cent) at 17,081.89. The broad-based S&P 500 dropped 13.77 points (0.68 per cent) to 2,003.69, while the tech-rich Nasdaq Composite Index fell 42.03 points (0.87 per cent) to 4,796.61.