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STI down 0.8% amid sea of red in Asia

This article is more than 12 months old

Last week's sell-off in global equities continues, fuelled by fears of higher US interest rates, the US-China spat and Trump's Fed attack

Hopes that last Friday's US stock rebound would provide a fresh start to the trading week were dashed in the Asia session yesterday. Singapore was not spared.

This came as investors were still gloomy after warnings from finance chiefs at the annual IMF meeting held over the weekend.

Yesterday's stock movements tracked a broad-based sell-off in global equities last week, egged on by fears of higher US interest rates, lingering worries over the US-China trade war, and attacks by US President Donald Trump on the Federal Reserve. "We can't say the shock is over," Rakuten Securities' chief strategist Masayuki Kubota told AFP.

Amid a region-wide slide, the benchmark Straits Times Index (STI) shed 23.2 points or 0.8 per cent to finish at 3,045.97. Losers beat gainers 262 to 143, after about 1.67 billion shares worth $1 billion changed hands.

Main laggards of the index included ComfortDelGro, which fell 3.2 per cent to $2.12. Venture Corp and YZJ Shipbuilding each slipped 2.4 per cent to end the day at $15.99 and $1.24 respectively.

Still, several brokerages are sanguine about the outlook for ComfortDelGro, with most issuing a "buy" rating on the counter. KGI Securities has recommended a target price of $2.72, and UOB Kay Hian, $2.59.

KGI Securities noted that ComforDelGro's share price fell as much as 5.5 per cent on Oct 10 after it was reported in the news that Indonesia's ride-hailing Go-Jek was entering the Singapore market on its own, instead of partnering ComfortDelGro as widely anticipated.

KGI Securities analysts say the market over-reacted. "We believe the entrance of Go-Jek into the Singapore market will not bring about the same level of competition as Uber and Grab's fight for market dominance, which was simply not sustainable.

"Therefore, we are of the view that the sell-off is overdone, and presents an attractive entry point for a defensive business offering 5 per cent dividend yield, sustained by strong free cash flows from stable operations."

Separately, consumer electronics manufacturer Hi-P International pared 8.7 per cent, or eight Singapore cents to $0.835, as the company lowered its earning guidance for the second time this year.

On the banking front, DBS was the only bright spot, inching up 0.2 per cent to close at $24.48, as UOB lost 0.5 per cent to $25.18, and OCBC fell 0.8 per cent to $10.66.

Meanwhile, Hotel Properties Limited added 3.3 per cent, or 12 Singapore cents to $3.80. OCBC Investment Research has a fair-value estimate of $4.74 on the counter, citing that a West Orchard redevelopment might be on the horizon, and that the stock is trading at a 26 per cent discount to its RNAV (revalued net asset value).

Catalist-listed Asiatic Group also jumped 20 per cent to 1.2 Singapore cents on news that it has inked a conditional share subscription agreement that will give the buyer a 14.9 per cent stake in the firm.

Net proceeds are expected to come up to about $3.77 million, with businessman Stephen Leong agreeing to subscribe to 232 million new shares at $0.0165 apiece, a 65 per cent premium to the stock's last close on Oct 12.

Elsewhere in Asia, Japanese stocks led the way lower with the Topix shedding 1.6 per cent to 1,675.44 - its lowest finish in seven months.

For full listings of SGX prices, go to http://btd.sg/BTmkts