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Singapore shares close weaker on news that US rates may be raised in Dec
NEWS from the US that the Federal Reserve has left the door open for an interest rate hike in December probably led to Thursday's 39-point or 1.3-per-cent loss for the Straits Times Index (STI) at 3,001.51.
Alternatively, it could also be that the index, having bounced from its intraday low of 2,940 on Sept 29 to Monday's closing of 3,082 - a gain of 12.5 per cent in three weeks - was due a correction, regardless of the news or external backdrop. If so, then its third consecutive loss since Monday brought the correction to 82 points or 2.6 per cent.
In any event, volume remained low and focused mainly in index stocks. Total turnover amounted to a weak 1.2 billion units worth S$957 million, of which S$683 million or 71 per cent was done in the 30 STI members. Stripping out these 30 left 915 million units worth S$274 million which was done by the rest of the market, the unit average value of S$0.30 placing interest firmly in penny territory.
OCBC was the first of the banks to report Q3 earnings, its shares dropping S$0.08 on Wednesday after the release of its figures. The stock on Thursday lost a further S$0.12 to S$9.08 on volume of 7.4 million. Brokers delivered a mixed bag of recommendations in response - for example, Goldman Sachs (GS) described OCBC's figures as being in line with expectations and said it is "neutral'', while RHB called a "buy" albeit with a lowered target.
"Post 3Q15 results, we lower our FY15-FY17E EPS by up to 3.9 per cent to account for higher credit cost on weak economic outlook," said GS, setting its target price as S$10.70.