singapores sti retreats for the third consecutive session 955552015

The Singapore Exchange Limited (SGX:S68) continued its downward streak on the opening day of the week, pressured by negative cues from Wall Street, weak Chinese manufacturing data and fresh losses in Chinese equities.

Reassuring announcements from Noble Group Limited (SGX:N21) helped boost the stock by 3.3 per cent.

Indices and sectors

The Straits Times Index (STI) ended 9.71 points or 0.3 per cent lower to 3,192.79, taking the year-to-date performance to -5.12 per cent.

The FTSE ST Mid Cap Index declined 1.15 per cent, while the FTSE ST Small Cap Index declined 1.72 per cent.

The Singapore Exchange traded a volume of 1,477.7 million shares valued at SG$1,139.3 million. Losers outnumbered gainers by 350/137.

Amongst the FTSE ST sectors, the only gainer was technology (+0.95 per cent). Losing sectors included healthcare (-4.11 per cent), oil and gas (-2.52 per cent), maritime (-2.40 per cent), CataList index (-2.28 per cent) and China top index (-1.83 per cent).

Stocks

Noble Group Limited (SGX:N21), in a bid to stem the dramatic decline in the value of its stock last week, said it had potential support from strategic investors and that it had adequate liquidity to fund the redemption of a SG$735 million bond due this week. It clarified that it had ready cash of SG$1 billion and an additional SG$15 billion in bank credit lines. The company did not identify these strategic investors and said there was no guarantee of a deal in the near future but assured, however, that the board was committed to maximising shareholder value.

In an indication that its results for the second quarter could be better-than-expected, the company brought forward the release of its earnings report by three days to August 10, according to Reuters. On the same day, the company will release a report by independent accountants PwC that will examine its valuation and accounting practices. The company also said it would provide additional disclosures around the Yancoal asset valuation and inventory sales. The earnings report has been brought forward because Noble believes “misleading and untruthful information” about its financial situation will be resolved with the publication of the quarterly results, according to Bloomberg. The stock rose 3.30 per cent to close at SG$0.470 yesterday.

The Singapore Exchange Limited (SGX:S68) said on Monday that it was closely watching the developments on the Noble Group Limited (SGX:N21) stock. "We stand ready to take action against any market misconduct including any suspected manipulation and will work with the relevant authorities as appropriate,'' SGX said, according to the Business Times.

CWT Ltd (SGX:C14) fell 1.79 per cent to SG$2.20. The company said net profit during the second quarter ended June 30 fell 8 per cent to SG$27.8 million, while revenue slumped 45 per cent to SG$2 billion, on the back of a drop in demand for commodities logistics and the general decline in commodity prices. Channel News Asia reported that C&P Holdings, the company’s controlling shareholder, is considering a strategic review of its business and assets which could ultimately lead to a transaction.

Singapore Exchange Limited (SGX:S68) said in a statement on Monday evening that trading on its derivatives market was temporarily suspended at 7:56 PM due to a technical fault. Trading resumed at 9:45 PM, according to the bourse. The exchange had suffered from technical disruptions on November 5, 2014, and again on December 3, 2014. It has suffered reprimands from the Monetary Authority of Singapore for these lapses.

Ascott Limited, the wholly owned service residence arm of CapitaLand Limited (SGX:C31), is leading a consortium to invest US$50 million in Tujia.com, the online apartment sharing platform, often referred to as China’s answer to Airbnb Inc. Tujia has raised US$300 million in its latest funding round that values it at over US$1 billion, according to Deal Street Asia. In addition to its investment in Tujia.com, Ascott will also form a joint venture with the online apartment sharing platform with an initial capital of US$40 million (SG$54.15 million).

Bonvests Holdings Ltd (SGX:B28) has agreed to acquire the 4.5 star hotel property known as ‘Four Points by Sheraton Perth’ from APHV Perth InvestCo for AU$91.5 million (SG$91.8 million), according to the Business Times.

Tower crane manufacturer Yongmao Holdings Limited (SGX:E6A) said it incurred a net loss of 7.4 million yuan (SG$1.64 million) during the first quarter of FY2016, compared to a net profit of 36.2 million yuan in the prior year period. Revenue during the quarter crashed 62.9 per cent to 85.1 million yuan due to falling sales in a sluggish Chinese property market, according to the Business Times.

Economic news

Singapore’s manufacturing activity contracted in July after two consecutive months of expansion. The Purchasing Managers’ Index for July reported at 49.7, down 0.7 points from June, amidst a decline in export orders and contraction of production output. "This is a typical case of earlier optimism by manufacturers now being weighed down by the hard truth of weak demand," said DBS economist Irvin Seah, as quoted by the Straits Times.

The Athens stock exchange opened Monday after a five-week suspension. Greek stocks unofficially ended the day with losses of 16.2 per cent, while bank shares were down by the maximum permissible daily limit of 30 per cent, as reported by Channel News Asia.

On Wall Street, on Monday, stocks closed lower after the energy sector reacted to a sharp plunge in crude oil prices, and investors fretted about poor Chinese manufacturing data. The Dow Jones Industrial Average fell 91.66 points (0.52 per cent) to 17,598.20. The broad-based S&P 500 shed 5.80 points (0.28 per cent) at 2,098.04, while the tech-rich Nasdaq Composite Index lost 12.90 points (0.25 per cent) at 5,115.38.