STI falls for 5th consecutive session

A WEAK session on Thursday ended with the Straits Times Index falling 22.58 points or 0.76 per cent to 2,959.01 in low volume of 1.1 billion units worth S$944.7 million. The fall was mainly through selling of the banks and came despite a large bounce in Hong Kong and a slight gain for the Dow futures which suggested a firm Thursday for Wall Street.

Brokers said at its recent high the market had rebounded about 12 per cent from its September selloff and given a disappointing third quarter earnings reporting season, it could therefore be expected to undergo a correction. Thursday's slide was the index's fifth in a row, a losing streak that has seen it drop a total of 80 points or 2.6 per cent.

Liquidity has been a problem for all of 2015 and so it was again on Thursday when trading in the 30 STI components at 219.3 million units worth S$648.2 million accounted for 69 per cent of the whole market's dollar value traded. Excluding business done in the index, 880 million units worth S$296.5 million were traded, for an average of S$0.33 per unit. Excluding warrants, there were 140 rises versus 290 falls in the whole market.

In the telecom sector, Singtel closed unchanged at S$3.87 on volume of 20.6 million. OCBC Investment Research said as Singtel's figures were mostly in line with expectations, the broker is opting to keep its full-year estimates unchanged.

"However, we are paring our SOTP-based (sum-of-the-parts) fair value from S$4.38 to S$4.17 to account for the lower market value of its listed associates; but we continue to like the company's defensive business and strong free cash flow. Hence we maintain our BUY rating."