Singapore shares close higher, barely avoiding fifth straight loss

PERHAPS the best thing that can be said of Wednesday's stock market session was that the Straits Times Index avoided a fifth consecutive loss, though this was likely via short-covering than anything else.

Noble Group's volatility has also provided some scope for journalists looking to fill their pages but finding precious little to write about, especially since penny fever has quite clearly diminished.

In any event, after losing 93 points between Thursday last week and Tuesday, the STI's 0.35 of a point bounce to 3,191.39 on Wednesday brought some relief, even if it occurred in relatively low volume, and even if the advance-decline score of 188-243 excluding warrants pointed to more weakness than strength in the broad market.

The index owed its positive showing mainly to rises in Hongkong Land, Sembcorp Industries (SCI) and Keppel Corp. In SCI's case, the stock jumped S$0.30 or 8.7 per cent to S$3.76 on volume of 17 million after the company this week reported a 5.8 per cent year-on-year drop in revenue to S$2.4 billion but a 24.9 per cent increase in net profit to S$223.6 million for its second quarter, the latter according to OCBC Investment Research forming 50 per cent of the broker's full-year profit estimate.

"Looking ahead, intense competition in the power market is likely to persist, and low oil prices also mean that the marine division may continue to be a drag,'' said OCBC Investment Research.

"However, we believe that these concerns have already been priced in. Meanwhile, an interim dividend of S$0.05/share has been declared, same as last year. Updating our sum-of-parts valuation with a lower fair value estimate of Sembcorp Marine, our fair value for SCI drops from S$4.40 to S$4.31. Maintain 'buy'.''