singapores straits times index ends a shade higher as investors remain cautious 506472015

Singapore stocks represented by the Straits Times Index moved marginally higher Tuesday, taking a cue from overnight sharp gains on Wall Street. However, the volume of shares traded was sharply lower compared to the previous session on Monday.

In market action, the STI traded in alternate bouts of buying and selling through the session, and finally closed with just a minor gain.

Indices and sectors

The Straits Times Index (STI) ended 5.36 points or 0.15 per cent higher to 3508.61, taking the year-to-date performance to +4.26 per cent.

The FTSE ST Mid Cap Index gained 0.35 per cent, while the FTSE ST Small Cap Index rose 0.87 per cent.

The Singapore Exchange traded a volume of 2,046.7 million shares valued at SG$1,293.6 million. Gainers outnumbered losers by 262/199.

Amongst the FTSE ST sectors, the biggest gainers were utilities (+1.44 per cent), oil and gas (+1.40 per cent), industrials (+1.02 per cent) and consumer services (+0.89 per cent). The losing sectors were telecommunications (-1.35 per cent), technology (-0.78 per cent) and financials (-0.07 per cent).

Stocks

Singapore Telecommunications Limited (SGX:Z74) said yesterday that it was delisting its shares on the Australian Stock Exchange after being traded on that bourse for over 13 years. The company said it was taking the decision due to low trading volumes, thin liquidity and poor demand among investors, according to TODAY. “During the 12 months to March 31, the number of Singtel CDIs traded on the ASX accounted for only 6 per cent of all Singtel shares traded. This reflects institutional investors’ preference to hold and trade Singtel shares on its home exchange, the SGX,” the company said, and also confirmed that the Australian delisting would not affect its Optus operations in that country. It said it had no intentions of hiving off that unit nor floating it on an exchange.

Linc Energy Ltd (SGX:TI6), an oil and gas explorer and producer, updated its shareholders on company measures to counter the slump in oil prices, according to a report in Straits Times. It said its initiatives in this regard over the past six months included divestments of non-core assets and corporate initiatives such as debt restructuring and cuts in capital expenditure.

Shareholders in Cedar Strategic Holdings Ltd (SGX:530) have moved a requisition for an extraordinary general meeting (EGM) to remove the company’s chairman Charlie In Nany Sing and directors Huang Chuan, Yang Luoqing and Teo Moh Gin. Investors Jadiete Capital, SinoWealth Capital and Mr Christopher Chong Meng Tak, the requisitioners of the EGM, were taken on board by Cedar last year to bolster the company’s finances, according to Straits Times. Meanwhile, the company’s chief financial officer, Chen Siew Loon, resigned as he had not been paid his salary and CPF contributions.

KTL Global Limited (SGX:EB7), a rigging equipment and solutions provider for the offshore, oil & gas industries announced Tuesday that Mr Khua Kian Keong, the Executive Director and Chief Executive Officer of Singapore-listed Vibrant Group Ltd (SGX:F01), had emerged as a new substantial shareholder in the company after boosting his stake to 6.68 per cent, as reported by Straits Times. Said Mr Wilson Tan, KTL Global CEO: "We welcome Mr Khua – an experienced businessman and corporate figure – as a substantial shareholder of the company. We will continue to position ourselves as a global leader in the ropes and rigging industry through scaling up the value chain. We have articulated a clear strategy to grow which we believe will continue to attract investors seeking value.”

Perennial Real Estate Holdings Limited (SGX:40S) said it will develop an integrated mixed-use development in Penang in partnership with Malaysian developer IJM Land. Located on 1.4 million ft.² of waterfront freehold land in Gelugor town on the eastern coastline of Penang Island, the project will include malls, residential towers, and office tower, two hotels and a convention centre.

Retail mall REIT CapitaMall Trust (SGX:C38U) announced Tuesday that for the first quarter ended March 31, 2015, its distribution per unit (DPU) rose 4.3 per cent to 2.68 cents versus 2.57 cents in the prior year period. Revenue was up 1.6 per cent at SG$167.4 million and net property income was higher by 3 per cent at SG$117.7 million, according to Straits Times.

Commodity trader Noble Group Limited (SGX:N21) announced Tuesday that its wholly-owned and controlled subsidiary PT Equatorial Coal Abadi had invested US$3.5 million (SG$4.7 million) for 51 per cent in PT Sriwijaya Inti Daya, US$1.5 million for 49 per cent of PT Sriwijaya Multi Terminal and US$2.5 million for 49 per cent of PT Karimata Baru Terminal, or, on aggregate, US$7.5 million in the three Indonesian companies. These companies will form a fuel storage, supply and distribution network in Indonesia’s Sumatra and Java regions, and cater to the palm oil, power, and mining industries, according to Straits Times.

Tung Chee-chen, chairman of Orient Overseas (International) Limited (HKG:0316), a major Hong Kong shipping group, said in an interview in Singapore yesterday that the pace of M&A activity involving smaller players in the shipping industry is likely to pick up in the near future. However, on the subject of Neptune Orient Lines Ltd. (SGX:N03), he said a merger between the two companies was “unlikely” because of integration challenges considering their size, as reported by Business Times. He did concede that a takeover of NOL was “possible… I don’t think anybody rules anything out today.”

Economic news, currency and insight

A new report by Standard Chartered Bank says the impending interest rate hike in the United States would cause the Singapore dollar to weaken against the US dollar, though, in the long run, this would have only a minimum impact on Singapore’s economy, says Asia One. Observing that Singapore’s strong fundamentals would help it weather external shocks, even though it remained one of the world’s most open economies, the report said this was in part due to Singapore’s unique monetary policy framework. The report also observed that the Singapore economy had become far more diverse over the years and is now increasingly driven by services rather than goods trade. Though exchange-rate volatility due to US interest-rate changes could not be ruled out, the report said that the Monetary Authority of Singapore had the capacity to manage this volatility.

In overnight trading on Wall Street, stocks turned in a mixed performance. While tepid earnings reports push the Dow Jones lower, a proposed biotech megamerger helped the NASDAQ close near record high, according to Reuters. Earnings reports by Travellers, DuPont and IBM pressured the Dow Jones Industrial Average. Meanwhile Israeli drugmaker Teva made an unsolicited bid at US$82 per share of drugmaker Mylan. The Dow Jones Industrial Average fell 85.34 points, or 0.47 percent, to end at 17,949.59. The S&P 500 lost 3.11 points, or 0.15 percent, to 2,097.29 and the Nasdaq Composite added 19.50 points, or 0.39 percent, to 5,014.10.