Wuhan virus fears send STI to its first weekly loss of the year
UNDERSTANDABLY, the focal point of market talk this week was on the spread of the Wuhan coronavirus ahead of Chinese New Year.
Harking back memories of 2003's Sars outbreak in Asia, fears of the possibility of a new widespread epidemic kept investors on their toes. But the authorities appear more prepared.
China has stepped up its efforts by widening a travel ban beyond Wuhan, where the virus originated, with public transport now suspended in more than 10 cities. Worries over the virus has somewhat eased after The World Health Organization called the epidemic a local crisis instead of a global health emergency.
Overall, cautious attitudes still prevail in Asia despite the backdrop, with global equities trading near all-time highs and corporate earnings steady amid a recovering global economy.
In a shortened session, the local Straits Times Index (STI) made steady gains across the session to finish at 3,240.02, adding 5.46 points or 0.2 per cent. On the week, it lost 41.01 points or 1.3 per cent from Jan 17's close of 3,281.03.
Elsewhere in the Asia-Pacific, Australia, Hong Kong and Japan were trading higher, while Malaysia was slightly lower.
Markets in China, South Korea and Taiwan were closed for the holidays.
In the half-session, trading volume in Singapore clocked in at 1.11 billion securities while total turnover stood at S$760.13 million.
Decliners beat advancers 179 to 155. Thirteen of the benchmark's 30 counters ended in the red.
Thai Beverage was the most actively traded of the STI counters. Shares in the brewer turned the corner on a 9 per cent decline over the first four days of the trading week to add 0.5 Singapore cent or 0.6 per cent to 79.5 Singapore cents on 51.8 million shares traded.
Among telcos, StarHub added S$0.02 or 1.3 per cent to close at S$1.51 after agreeing to put up a joint-bid with fellow telco M1 for one of the four 5G network licences in Singapore.
On the joint-bid with the Keppel Corp unit, Citi Research analyst Arthur Pineda noted: "On the surface, network sharing should be welcomed by investors as this reduces the risk on earnings and dividends for StarHub."
That being said, Citi has maintained its "sell" recommendation on StarHub on grounds that it will see "sustained earnings pressure on the horizon, given challenging revenue trends and network investment costs". Citi has a price target of S$1.22.
M1's parent Keppel Corp edged up S$0.01 or 0.15 per cent to S$6.75 after posting a 42 per cent increase in its Q4 bottom line to S$191.4 million on the back of a stronger performance from the offshore and marine (O&M), property and investments divisions.
Q4 revenue for the conglomerate was S$2.2 billion, up 31.1 per cent year-on-year.
"Looking ahead, the outlook for the company's business divisions appears robust, property sales should continue its growth trajectory, and we expect O&M to continue its new order win success from 2019," UOB Kay Hian head of research Adrian Loh said.
He raised his price target for Keppel from S$7.61 to S$7.75 after the results were announced.
