HAVING bounced 245 points in just eight trading sessions, the Straits Times Index (STI) on Tuesday dropped 47.23 points or 1.6 per cent to 2,984.88 in line with weakness in Hong Kong and the Dow futures. Turnover dropped from S$1.4 billion on Monday to 1.3 billion units worth S$1.1 billion though the proportion contributed by trading in the 30 index members at 77 per cent was higher than Monday's 73 per cent.
The selling in Hong Kong that dragged the Hang Seng 0.6 per cent down came after the release of China trade data that was widely interpreted as being weak. Europe then opened in the red in the afternoon and at 5pm, the Dow futures had lost about 90 points, pointing to a weak Tuesday for Wall Street.
Among the top volume was STI component Genting Singapore, which slid S$0.03 to S$0.78 on volume of 31.3 million. Deutsche Bank initiated coverage of Genting on Oct 12 with a "sell" and target price of S$0.50.
"We expect Singapore's 2015 gross gaming revenue (GGR) to shrink 11 per cent to S$6.7 billion, the second-lowest GGR since its opening in 2010. Accordingly we estimate Genting's FY profit will fall by 50 per cent year on year and we see downside risk to consensus profit; our FY15-16E GENS profit is >30 per cent below consensus" said DB. Its price target was based on a price-earnings (PE) of 18 and a 10 per cent discount to historical consensus PE.