Banks continue to drag STI lower
Banks' exposure to the oil and gas sector back in the limelight; they account for 21 per cent of the market's turnover
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WEAKNESS in the three banks following fresh concerns over their oil and gas (O&G) sector exposure was the main factor behind the 15.98- point loss at 3,278.95 that the Straits Times Index (STI) suffered on Wednesday. It did, however, manage to rebound almost 20 points off its intraday low of 3,259.
A fair bit of this recovery was from OCBC, which sank to S$11 before closing with only a S$0.02 loss at S$11.19 on volume of 5.2 million. Losses in the three banks cut 12 points off the STI, with Jardine stocks also featuring prominently. The market's turnover amounted to 1.74 billion units worth S$1.2 billion, of which S$246 million or 21 per cent came from trading of the banks. The advance-decline score excluding warrants was 168 to 262.
Brokers said the suspension of O&G company Ezion because of financial difficulties and large losses reported by others in the sector like Nam Cheong and Marco Polo Marine have thrust banks' exposure to the sector back into the limelight and prompted a re-evaluation of bottomlines.
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