Mod­er­a­tion in Chi­nese data drags STI

The New Paper - - BUSINESS - CLAIRE HUANG

Grow­ing con­cerns over de­layed US tax cuts also weighs on STI

The soft start to the week for Sin­ga­pore and re­gional mar­kets con­tin­ued for a sec­ond day on the back of grow­ing con­cerns that the al­ready de­layed US tax cuts could be fur­ther pushed back.

On Tues­day, the bench­mark Straits Times In­dex (STI) lost 20.04 points or 0.59 per cent to end lower at 3,399.09 af­ter re­treat­ing from an in­tra­day high of 3,422.46.

Across Asia, Tokyo’s Nikkei, Seoul’s Kospi, Hong Kong’s Hang Seng and Aus­tralian shares were down, while New Zealand eq­ui­ties were up.

Turnover for the day in Sin­ga­pore came in at 2.6 bil­lion worth $1.7 bil­lion, work­ing out to an av­er­age of $0.65.

GAIN­ERS

Ex­clud­ing war­rants, the ad­vance-de­cline score was 149322, in­di­cat­ing broad-based losses.

The in­dex’s per­for­mance closely fol­lowed the Dow fu­tures which were un­changed five min­utes be­fore 5pm.

Adding on to un­cer­tainty was a broad-based mod­er­a­tion in Chi­nese data. As Mr Nathan Chow, econ­o­mist at DBS Group Re­search noted, growth in China’s in­dus­trial pro­duc­tion de­clined to 6.2 per cent year-on-year from 6.6 per cent in Septem­ber.

“The slow­down was mainly at­trib­uted to air-pol­lu­tion curbs. Reg­u­la­tors re­cently or­dered steel mills and alu­minium fac­to­ries to cur­tail pro­duc­tion, which af­fected wide swaths of the coun­try’s man­u­fac­tur­ing sec­tor. Look­ing at the break­down, out­put in­creased at a slower pace for man­u­fac­tur­ing (6.7 per cent from 8.1 per cent), while min­ing pro­duc­tion con­tin­ued to de­cline (-1.3 per cent from -3.8 per cent),” Mr Chow said.

Mar­ket movers UOB, Sing­tel, Wil­mar In­ter­na­tional, Kep­pel Cor­po­ra­tion and OCBC wiped out more than 13 points from the in­dex.

In par­tic­u­lar, Wil­mar In­ter­na­tional, which posted a 5.7 per cent year-on-year fall in net profit to US$370 mil­lion, saw its counter los­ing 13 Sin­ga­pore cents to end at $3.19 on a vol­ume of 18.2 mil­lion.

In a bro­kers’ re­port, OCBC main­tained its “hold” call on the stock but low­ered the tar­get price from $3.66 to $3.51.

LOSERS

“Look­ing ahead, man­age­ment ex­pects the good per­for­mance in the oilseeds and grains seg­ment to con­tinue into Q4-17, with crush mar­gins and vol­ume likely to re­main pos­i­tive. Per­for­mance of the other ma­jor busi­ness seg­ments is ex­pected to be “sat­is­fac­tory”, the re­search house said.

Malaysian prop­erty de­vel­oper Cap­i­tal World was ac­tively traded, with the stock adding 0.5 Sin­ga­pore cent to end at $0.098 on a vol­ume of 23.8 mil­lion units.

Still on the ac­tives list was Cosco Ship­ping In­ter­na­tional whose shares closed 4 Sin­ga­pore cents up to $0.585 on a vol­ume of 104.6 mil­lion.

Also on the ac­tives list was Global Lo­gis­tic Prop­er­ties whose shares were down 1 Sin- gapore cent to $3.32, with 76.6 mil­lion units chang­ing hands.

US tax cuts aside, the world’s top four cen­tral bankers met in Frank­furt yes­ter­day for talks hosted by Euro­pean Cen­tral Bank (ECB) Pres­i­dent Mario Draghi, who was joined by US Fed­eral Re­serve Chair Janet Yellen, Bank of Eng­land (BOE) Gov­er­nor Mark Carney and Bank of Ja­pan (BOJ) Gov­er­nor Haruhiko Kuroda.

Mr Philip Wee, for­eign ex­change strate­gist at DBS Group Re­search, noted that the chang­ing of guard at the world’s top cen­tral banks over the next cou­ple of years “mark a shift from mone­tary pol­icy di­ver­gences to­wards con­ver­gence”, likely in the lat­ter half of 2018.

huangjy@sph.com.sg

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