Singapore: Keppel, Jardine drag index lower

The Straits Times Index on Tuesday sank 20.76 points to 3,495.09 weighed down by falls in Keppel Corp and the Jardine stable. Turnover was 1.7 billion units worth S$1.36 billion for a unit average of S$0.80 and excluding warrants, there were 182 rises versus 268 falls.

Once again a surge in Hong Kong did not have any positive effect here, with the local market continuing to run on its own steam, possibly influenced by caution ahead of this week's US Federal Open Markets Committee meeting which ends on Wednesday. It should be noted, however, that Hong Kong lost almost all of its gains by the time it closed at 4pm.

Keppel Corp plunged S$0.23 or 2.6 per cent to S$8.77 on volume of 7.7 million shares. DBS, which reported its first quarter figures on Monday, ended S$0.10 higher at S$20.99 on volume of 3.4 million. DBS net profit for the three months ended March 31 was S$1.13 billion excluding one-off items.

Nomura in response said DBS's figures were in line with its estimates but 9 per cent above the market's. "We think the difference between the actual and the market estimate is probably due to better trading income," said Nomura.

"While there may be concerns over the slower loan growth based on constant exchange rate, the management has indicated that the culprit, trade finance loans to China, are starting to stabilise and they expect loan growth for the year to be 6 per cent y-y...We have a Buy rating with a price target of S$24.30.."