Singapore shares close 0.5% lower, ending two straight days of gains

SINGAPORE shares traded directionlessly and ended two straight days of gains with the key Straits Times Index finishing 14.38 points or 0.51 per cent lower at 2,825.51 on Monday.

The retreat in the local bourse echoed the pattern in Japan, Hong Kong and China, which all closed lower by between 0.8 and 1.2 per cent. Overall, the region put up a mixed showing, with South Korea, Taiwan, Australia and Malaysia posting gains.

Trading sentiment at the start of the week appeared cautious on geopolitical concerns - Reuters reported that the US was preparing to impose sanctions on some Chinese officials - while oil prices fell on news of the rising number of Covid-19 cases, including in Hong Kong and the US.

Even so, the vaccine roll out, which starts in the UK this week, will continue to light up hope that the deadly pandemic could soon be under control.

In a note, CIMB private banking economist Song Seng Wun said he expects market participants to continue to focus on the long-elusive US stimulus deal this week, after signs over the weekend that momentum on the negotiations was picking up.

On the docket are notable US macro releases, including the latest consumer and producer price data. This plus another batch of industrial production and foreign trade data, as well as Q3 GDP growth figures out of the euro zone and Japan will be closely watched.

In Singapore, some 2.33 billion shares worth S$1.47 billion changed hands. Among the STI constituents, 10 counters were up and 19 down. Singapore's three banks led Monday's losses.

Sembcorp Marine topped the day's most active with 234 million shares worth S$39.3 million done. The counter fell 0.7 Singapore cent or 4.09 per cent to 16.4 Singapore cents.

Singtel surged as high as 11 per cent early in the day, but pared the gains to close merely 7 Singapore cents or 3 per cent up at S$2.41. The counter bucked the general market trend after its consortium with Grab Holdings was awarded a licence to run a digital full bank in Singapore.

Sembcorp Industries lost 6 Singapore cents or 3.2 per cent to S$1.79. The conglomerate issued a profit warning on Monday; it expects to sink into the red for the year ending December 2020, owing to impairments for utilities assets in UK, Singapore and China in the second half of the year.

Japfa gained 3.5 Singapore cents or 4.6 per cent to 80.5 Singapore cents. The agri-food firm said it will sell an 80 per cent stake in its Indonesian dairy unit to private equity firms TPG and Northstar Group for $236 million.

Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) fell one Singapore cent or 2.8 per cent to 34.5 Singapore cents after key proposed amendments to its trust deed to facilitate the scheme meeting on the proposed merger with ESR-Reit was not passed at last Friday's extraordinary general meeting. ESR Reit dipped 1.5 Singapore cents or 3.7 per cent to 39.5 Singapore cents.