AFTER Tuesday's play influenced by the inclusion of the Chinese currency in the International Monetary Fund's (IMF's) basket of reserve currencies, the market's attention on Wednesday turned to Thursday's European Central Bank policy meeting at which more monetary easing is expected and to China, where hopes of more easing helped push stocks higher.
The Straits Times Index managed a second consecutive rise of 13.38 points to 2,883.64. Volume, which spiked up on Monday to S$1.7 billion most probably because of month-ending window-dressing, amounted to 945.3 million units worth S$1.06 billion, much more in line with recent averages. Excluding warrants, there were 204 rises versus 180 falls.
In the offshore and marine sector, shares of SembCorp Marine (SMM) plunged S$0.09 or 4.4 per cent to S$1.97 on volume of 6.1 million after the company on Tuesday issued a profit warning.
OCBC Investment Research said it expects downward earnings revisions from all brokers and for its part it has cut FY15/16 forecast earnings by 37 and 11 per cent, respectively. "With increasing earnings uncertainty, we switch our valuation to 1.15x FY16F P/B (price/book) close to where the stock was trading at previously when its ROE (return on equity) was at depressed levels," said the broker. "This leads to a drop in our fair value estimate from S$2.00 to S$1.79. Maintain SELL."