Singapore: Shares close weaker as selling resumes after short-covering ends

MONDAY's column said there was not much to be optimistic about when it comes to the stock market and that when the short-covering which lifted the Straits Times Index at the end of last week was finished, it was likely that weakness would set in. As it turned out, this was an accurate forecast - the Straits Times Index dropped 46.9 points or 1.5 per cent to 3,067.35 on Monday, volume was a weak 1.3 billion units worth S$1.06 billion and excluding warrants, the advance-decline score was 110-346.

Volatility and ultimately, weakness in Hong Kong and anticipation of a Monday slide on Wall Street, were possibly the main reasons for the pressure, this after last week's turmoil created by the surprise devaluation of the yuan.

There were few features of interest in a broadly featureless day. Two stood out though - China underwear firm Great Group and commodities firm Noble. The former leapt to second spot in the actives list when it dropped S$0.001 to S$0.034 on volume of 61 million, while the latter topped the list with a S$0.035 or 7 per cent slide to S$0.455 on volume of 78.2 million, possibly because of news that Phillip Securities has placed Internet trading restrictions on the stock.

Elsewhere, shares of offshore and marine firm Ezion plunged S$0.065 or 9 per cent to S$0.66 with 34.3 million traded. KGI Fraser Securities said the company's Q2 profit of US$29 million was below expectations, and noted that its fundamentals are deteriorating and that it could be hit by an oversupply. As a result, it called a "sell" on Ezion with S$0.58 target price. RHB however, maintained its "buy'' with S$1.60 target price, as did OCBC Investment Research whose target for Ezion is S$1.05.