STI dips slightly ahead of US-China talks

SINGAPORE stocks reversed course to end slightly lower on Monday despite opening higher following a strong Wall Street finish last Friday.

The Straits Times Index (STI) fell 4.73 points or 0.15 per cent to close at 3,204.71, dragged mainly by Jardine Matheson which lost 1.4 per cent to US$64.03.

Gainers outnumbered losers 208 to 191, with about 1.28 billion shares worth S$859.1 million in total changing hands.

The most actively traded counter was Thai Beverage, which rose 0.8 per cent, or 0.5 Singapore cent to S$0.65, with 44.5 million shares traded.

Both OCBC Investment Research and DBS Group Research have issued "buy" calls on Thai Bev with a target price of S$0.89 and S$0.94 respectively.

Though the group posted weak third-quarter results last week with a 61 per cent fall in net profit to 5.99 billion baht (S$247.3 million), DBS Group Research noted that it remains "hopeful of sequential recovery on signs of farm income uptick". The brokerage added that the group's share price could remain volatile, and that investors should buy for long-term potential.

Meanwhile, Phillip Securities downgraded its rating on Thai Bev to "reduce" with a target price of S$0.62 from S$1.05 previously, citing that the group's third-quarter earnings came in below expectations. It added that the group's spirits demand was hurt by weak rural incomes in Thailand due to soft agriculture prices.

Separately, other active stocks included AEM Holdings, which rose 14.5 per cent to S$0.99. This comes after the semiconductor equipment maker recently undertook several share buybacks. On Aug 6, AEM's non-executive and independent director Loh Kin Wah acquired 200,000 shares of AEM for a consideration of S$136,000, raising his direct stake to about 0.2 per cent. The company also bought back 200,000 shares for S$131,336 from Aug 10 to Aug 16.

On the banking front, stocks ended mixed with DBS rising 0.3 per cent, or eight Singapore cents to S$25.17. However, UOB lost 0.4 or 11 Singapore cents to S$26.70, while OCBC retreated 0.3 per cent, or three Singapore cents to close at S$11.19.

Also on Monday, Noble rose 2.6 per cent, or 0.3 Singapore cent to S$0.118 on the back of news that its founder Richard Elman will not be taking up the post of executive director post-restructuring, citing personal reasons for his decision.

Elsewhere, Asian markets had a broadly positive start to the week, as investors cheered on planned trade talks between the US and China.

Hong Kong shares rebounded to close up 1.4 per cent to 27,598.02, the most since Aug 7, as a stabilising yuan and optimism over Sino-US tariff talks improved risk appetite.

Similarly, the Shanghai Composite rose 1.1 per cent to 2,698.47, after falling as much as 0.6 per cent to 2,653.11. This is the index's largest gain since Aug 9, and its first advance in six days.

South Korea's Kospi closed up 0.04 per cent at 2,247.88, and Australia's S&P/ASX 200 added 0.09 per cent to settle at 6,344.99.

Meanwhile, Japan's Topix index retreated 0.32 per cent to 1,692.15 as investors waited on the sidelines to see how talks between Washington and Beijing might pan out.

Said Rakuten Securities' chief global strategist, Mutsumi Kagawa: "The market is caught between hopes and worries."

"The hopes are about possible progress in US-China trade frictions, but concern about the Turkish situation is still weighing on the market," he told AFP.

Nonetheless, IG market strategist Pan Jingyi noted that lingering trade and Turkey concerns are likely to ebb into the fresh week mixed with a strong focus on developments surrounding the US Federal Reserve.

"While US markets continue to power ahead, the greenback will be one to watch this week and the corresponding impact upon Asia markets," noted Ms Pan.

For the full listing of SGX prices, go to btd.sg/BTmkts