Earnings gloom weighs on blue chips

APPLE executives may have popped the bubbly after the stock reached the trillion-dollar valuation milestone, but Wall Street's overnight tech-led glee did not lift the earnings-inspired gloom in Singapore.

The Straits Times Index (STI) retreated by 20.59 points, or 0.63 per cent, to 3,265.73 - despite crossing 3,300 in an early morning spike - as blue chips hit choppy waters in quarterly results. The benchmark index has shed 1.78 per cent on the week.

Across the board, losers beat gainers 259 to 141, as 1.73 billion shares changed hands for S$1.08 billion.

Singapore Post tumbled by S$0.13, or 9.42 per cent, to S$1.25, after first-quarter net profit slid by 40 per cent on the year before, to S$18.7 million, amid an exceptional fair-value loss.

Meanwhile, DBS lost S$0.37, or 1.4 per cent, to S$26.13, a day after turning in below-forecast second-quarter earnings. Singapore's largest bank was downgraded to "hold" by both UOB Kay Hian's Jonathan Koh and CGS-CIMB's Lim Siew Khee on expectations of a limited share price upside.

United Overseas Bank dipped by S$0.11, or 0.41 per cent, to S$26.59, even though its results, out before the opening bell, saw a second-quarter profit that beat estimates.

Of the three local banks, "OCBC will be the last to report on Monday, one to watch as the STI struggles with the 3,300 handle", according to IG Asia market strategist Pan Jingyi.

More happily, Sembcorp Industries ticked up by S$0.01, or 0.38 per cent, to S$2.63, after a 47 per cent year-on-year rise in second-quarter earnings. Bloomberg has reported that Sembcorp and Keppel Corp may be eyeing bids for Hyflux's loss-making Tuaspring plant. Keppel dipped by S$0.04, or 0.59 per cent, to S$6.73.

Technology stocks were mixed after the latest Singapore Purchasing Managers' Index showed easing manufacturing activity, including in electronics, as global trade disputes put a crimp on business sentiment.

Venture Corp gained S$0.03, or 0.18 per cent, to S$16.85, ahead of its after-market results announcement. But, off the index, AEM Holdings shed S$0.025, or 3.4 per cent, to S$0.71, while Hi-P International slid by S$0.06, or 5.22 per cent, to S$1.09.

Y Ventures Group slipped by S$0.01, or 2 per cent, to S$0.49. The decline was in spite of an upgrade from "neutral" to "buy" from Phillip Securities analyst Alvin Chia after a subsidiary announced a US$50 million initial coin offering to fund the development of a global buying platform called Aora.

"Our upgrade is due to the recent price movements," Mr Chia said on Friday, sticking to a S$0.70 target price. "Since Aora is in its infancy, we are not changing our fundamental view of the group. However, if successful, the value accretion will be tremendous."

Communications network company Ntegrator International, which had earlier warned of an expected loss for the six months to June 30, sprang up the actives list on a churn of 19.5 million shares. It inched up by 0.1 Singapore cent to 0.8 Singapore cent. Its half-year results are scheduled to be released by Aug 14.

Across the region, Shanghai lost one per cent and Hong Kong dipped by 0.14 per cent, with Tokyo inching higher by 0.06 per cent.