STI closes at its lowest since June 2012

THE Straits Times Index (STI) on Tuesday fell 29.53 points or one per cent to 2,841.94, a level not seen since June 2012. Weakness in China and Hong Kong that followed an overnight slump on Wall Street as well as a drop in the Dow futures contract that indicated a soft Tuesday for the US market all added up to weigh on sentiment here.

Turnover, however, was boosted significantly to 1.34 billion units worth S$1.5 billion by the crossing of 222 million shares of Olam International at S$2.75 apiece. This was part of the deal announced late last month that would see Japan's Mitsubishi Corp become a strategic shareholder. Olam's shares on Tuesday rose S$0.015 to S$2 on a volume of 222.8 million. In the commodities sector, shares of Golden Agri Resources (GAR) ended unchanged at S$0.31 on a volume of 22.9 million.

Goldman Sachs in a Sept 14 Asean Agriculture report on plantations said it is cutting its 20015-2017 estimated crude palm oil (CPO) prices by 13-14 per cent. It said GAR's earnings are the most sensitive to lower CPO prices and export levies given the company's high production costs and called a "sell" with 12-month target of S$0.20. "Furthermore, the new biological assets accounting standards from 2016 will result in higher depreciation, further driving EPS lower from 2016," it said.