singapores straits times index sheds 0 33 per cent amidst china stock selloff 571362015

The China effect weighed on Singapore stocks during Tuesday’s trading session. The deepening sell-off in both mainland and Hong Kong stocks took their toll on the local bourse, as apparent from the declines seen in the FTSE China Top Index and the China sectors, which fell over 2 per cent and 1 per cent respectively.

Yesterday, the Shanghai index fell over 4 per cent and the Hang Seng index plunged 1.31 per cent.

The day’s trading was marked by a steady decline in the STI that commenced at the opening and lasted till around 4 PM. Value buying triggered a last-hour rally which clawed back a substantial portion of the day’s losses.

The value of shares traded during the day was rather low and the market breadth was biased in favour of declining stocks.

Indices and sectors

The Straits Times Index (STI) ended 11.51 points or 0.33 per cent lower at 3,471.19, taking the year-to-date performance to +3.15 per cent.

The FTSE ST Mid Cap Index declined 0.78 per cent, while the FTSE ST Small Cap Index declined 0.92 per cent.

The Singapore Exchange traded a volume of 1,514.2 million shares valued at SG$888.5 million. Losers outnumbered gainers by 279/175.

Amongst the FTSE ST sectors, the only gainers were real estate investment trusts (+0.03 per cent) and consumer services (+0.02 per cent). The biggest losers were utilities (-5.58 per cent), basic materials (-2.85 per cent), China Top Index (-2.02 per cent), maritime (-1.66 per cent) and China (-1.15 per cent).

Stocks

OSIM International Ltd. (SGX:O23) said earnings during the first quarter ended March dipped 53 per cent to SG$13.5 million compared to SG$29 million in the prior year period. Revenue declined 13 per cent to SG$149.8 million from SG$172.6 million, according to Channel News Asia. A statement by the lifestyle company said that first quarter results were impacted by weak retail sales in its major markets. The company kept its interim dividend unchanged at 1 cent per share compared to the prior year period.

Shares in Tiger Airways Holdings Limited (SGX:J7X) fell 7.25 per cent to SG$0.320 after the budget airline warned that excess capacity could pressure profits. “There continues to be surplus capacity in the industry which would have downward pressure on yields. Nonetheless, the group expects to continue making headway in its turnaround effort by optimizing fleet size and improving yields and loads,” Tigerair said yesterday. The airline reported a net loss of SG$18.8 million during the quarter ended March 31, substantially lower than the SG$95.5 million loss incurred in the prior year period. Revenues, however, were up 5 per cent to SG$172.2 million, according to Channel News Asia. “Our turnaround efforts continue to bear fruit,” said Tigerair chief executive Lee Lik Hsin. “More than half of the recovery in operating performance came from stronger yields and load factors, while the remainder came from lower fuel prices.”

Noble Group Limited (SGX:N21) made moves towards higher transparency and better disclosures in its first-quarter results ended March 31, 2015. For the first time ever, the commodity trader revealed its net fair value gains and losses by segment and region, and disclosed segmental details of its earnings before interest and tax, according to Business Times. The company also restructured its reporting so as to include energy, coal and oil liquids into one segment, whereas power and gas, as well as US energy services, were grouped in another segment. However, the new disclosures were brushed off by Muddy Waters and Iceberg Research, arch critics of Noble, who said the disclosures were “not truly useful” and “not what the market wants,” according to Business Times.

In a surprise move, Noble brought forward the declaration of its first-quarter results by two days. The company announced yesterday that its net profit fell 30 per cent to US$107 million (SG$142 million) from US$152 million in the prior year period, weighed by the collapse in the price of oil and other commodities. Revenue fell 7 per cent to US$16.6 billion for the period. Nevertheless, shares in Noble Group Limited (SGX:N21) were the top gainer on the STI yesterday, closing higher by 4.1 per cent at SG$0.890.

Traditional Chinese medicine company Eu Yan Sang International Ltd. (SGX:E02) said profit for the three months ended in March declined 38 per cent to SG$5.45 million while revenues remained flat at SG$110.4 million, according to Channel News Asia. The company said falling sales in Hong Kong and Macau were counterbalanced by better turnover in Singapore, Malaysia and Australia.

Construction company BBR Holdings (S) Ltd. (SGX:KJ5) said net profit during the three months ended March 31 collapsed by 83.2 per cent to SG$848,000 from SG$142.8 million in the prior year period. Revenue slumped 35.7 per cent to SG$91.8 million, as most of the group’s projects in its general construction business were under active stages of construction.

Property and hospitality group Roxy-Pacific Holdings Ltd (SGX:E8Z) said net profit during the three months ended March 31 shot up threefold to SG$46.5 million while revenue surged 146 per cent to SG$198.2 million. The results were driven mainly by “healthy growth” in the company’s property development and investment segments, according to Straits Times. The completion of the Centropod@Changi project on the former Changi Hotel site also played a major role in the higher profitability, according to Business Times.

mDR Ltd (SGX:A27) said it is proposing to set up a large-format digital inkjet printing business in Myanmar through Pixio, its wholly-owned Malaysian outdoor advertising subsidiary.

Economic news, currency and insight

The Reserve Bank of Australia cut its benchmark cash rate by 25 basis points to a record low of 2.0 per cent in a two pronged move aimed at boosting growth in the Australian economy, while weakening the local currency.

On Wall Street, stocks ended sharply down on Tuesday, weighed by an unexpectedly large US trade deficit during March that raised fears that the economy might have contracted during the first quarter. Other factors which negatively impacted the markets were Greece as well as concerns surrounding the non-farm payroll report due Friday. The Dow Jones Industrial Average fell 142.2 points, or 0.79 percent, to end at 17,927.2. The S&P 500 lost 25.03 points, or 1.18 percent, to 2,089.46 and the Nasdaq Composite dropped 77.60 points, or 1.55 percent, to end the session at 4,939.33.