Singapore shares fall as cautious investors await Fed’s next move
Tay Peck Gek
SINGAPORE shares fell on Tuesday (Sep 19) in tandem with most regional indices, with investors cautiously waiting on the upcoming US Federal Reserve meeting that is taking place over the next two days. Fed officials are widely expected to hold interest rates at their current level.
The Straits Times Index (STI) was 0.7 per cent or 22.64 points lower at 3,240.75 points. Tan De Jun, assistant manager of the research & portfolio management team at FSMOne.com, pointed out that investors could be nervous that the Fed will do something “unexpected”.
Several counters in the oil and gas sector are riding the rising oil price wave amid higher demand and output cut, bucking the decline in the STI. At least three oil exploration and production stocks Rex International , RH Petrogas and Interra Resource benefitted.
Rex International share price rose 9.6 per cent to S$0.205 and RH Petrogas shares were up 2.4 per cent to S$0.215, as the two continued their ascent since bouncing off the lows in August. Interra Resource share price increased by 5.9 per cent to S$0.036.
A higher for longer oil price environment would continue to persist, FSMOne.com’s senior research analyst Chloe Nadia Halim believes, especially as the oil and gas sector is underinvested. This is a persistent problem that is difficult to change, with investment on a downward trend since 2014.
Added Halim: “Besides benefiting exploration and production companies, higher for longer oil prices could result in increased investments in offshore vessels from oil and gas companies, and could benefit players such as Yangzijiang Shipbuilding and Seatrium over the longer term.”
Gainers beat decliners marginally 256 to 253 across the broader market, with 1.1 billion securities worth a total of S$888.9 million in value transacted.
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