Singapore shares closed at a more than three-month low Friday, capping off a volatile week in which the benchmark Straits Times Index shed 3.6% amid fresh uncertainty over Europe's debt problems while earnings from local blue chips have largely disappointed.
The Straits Times Index closed 0.7%, or 20.20 points, lower at 2,883.40, its lowest close since Jan. 30. Across the market, losers outnumbered gainers 312 to 97 and volume was a tad lower at 1.92 billion shares compared with 1.99 billion Thursday.
"Euro-zone debt worries are back with a vengeance" amid "austerity fatigue," said Lee Heng Guie, an analyst at CIMB in a note. "We expect more market volatility due to the potential policy clash between those in favor of and those against a restrictive fiscal compact (in Europe)," he said.
Apart from Europe's woes, local earnings have been far from encouraging, with many companies reporting sharp pullbacks in profits.
"The corporate earnings season has revealed a few cracks among Singapore's stalwarts," said Jason Hughes at IG Markets Singapore. "Singapore traders will be welcoming the weekend after a dire week," he added.
One of today's biggest casualties after reporting earnings was Genting Singapore. It shares shed 2.7% to S$1.625 after it said lower takings from its premium-gambler business pushed its first-quarter net profit down by 31% to S$211.5 million.
Among other blue-chip decliners still suffering after reporting disappointing earnings earlier in the week, Neptune Orient Lines ended down 2.6% at S$1.105 and Wilmar International shed 3.0% to S$4.14.
Singapore's banks however have been a relative bright spot amid the bleak corporate reports. All three banks have now reported strong growth in lending as well as trading and investment income.
Oversea-Chinese Banking Corp., Singapore's second largest bank by assets, ended up 0.1% at S$8.94 after its first-quarter net profit climbed 32% to S$832 million. The result beat market expectations thanks to stronger loan growth as well as improved performance from its life insurance subsidiary. DBS Group closed down 0.2% at S$13.87, while United Overseas Bank ended down 1.6% at S$18.30. The banks' relatively resilient performance comes despite a selloff for their global peers after news of US$2 billion in trading losses at U.S. banking giant JPMorgan Chase & Co.
Singapore Telecommunications was one of the day's best performers, adding 0.9% to S$3.24. Singapore's biggest firm by market capitalization on Thursday reported a 30% surge in fourth-quarter net profit to S$1.29 billion. Fellow telecoms firm StarHub ended up 0.6% at S$3.24.
Just to Share.
In the coming week, Europe will remain the key factor to drive the market action especially on their politics condition like Greece, Italian and French debt auctions. The STI seems enter a bearish condition, we should stay calm and monitor it until the consolidation mode is on. Otherwise it is better not to buy on pullback now.
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