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Singapore shares close lower as banks, Wilmar drag STI lower

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WALL Street's Tuesday rally failed to break the Straits Times Index's (STI) losing streak, with the local benchmark losing 8.28 points at 2,732.87 on Wednesday in response to falls in Hong Kong and the Dow futures.

Turnover at one billion units worth S$1.1 billion was average and excluding warrants, there were 182 rises versus 203 falls. It was the index's 12th loss in 13 sessions during which it has fallen 228 points or 7.7 per cent.

"It is difficult to see what might shake the market out of its present downturn,'' said a dealer. "For now, stocks are being avoided like the plague and safe havens like bonds are doing well.''

Banks have been the prime index movers during the past fortnight, though OCBC on Wednesday did manage a S$0.03 rise to S$8.33 on volume of 5.6 million. DBS and UOB, on the other hand, closed weaker.

A big index loser was commodities firm Wilmar International, whose shares sank S$0.12 or 3.5 per cent to S$3.29 on volume of 34.1 million after the company, when reporting its first quarter earnings, said it expects operating conditions in the second quarter to be challenging.

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Macquarie Warrants (MW) in its daily newsletter said Macquarie Equities Research (MER) views Wilmar's first quarter performance as strong, but the mixed outlook statement raises the spectre of past periods of heightened margin volatility, which will temper the market's enthusiasm. It said MER has a "neutral" rating on Wilmar with a 12-month target price of S$3.45.

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