Singapore shares close weaker as Hong Kong, Dow futures dive in line with weak oil

SINGTEL'S S$0.12 slide to S$3.54 ahead of its Q3 results on Friday accounted for an 11 point of the total loss of 43.82 points or 1.7 per cent suffered by the Straits Times Index on Thursday in a session that was weak and devoid of many redeeming features. The fall came in line with a 3.9 per cent drop in Hong Kong, a 270 point loss for the Dow futures that indicated Wall Street would be in for a torrid Thursday and a fall in the oil price to below US$27 per barrel.

Turnover amounted to 817 million units worth S$1.05 billion compared to Wednesday's S$1.2 billion and excluding warrants there were 119 rises versus 264 falls.

News reports attributed the selling to the same issues which have plagued markets for several months now - falling oil prices, China's slowing economy, a wobbly Wall Street and divergent monetary policy pursued by the world's major central banks.

Singtel on Friday surged S$0.22 or 6.3 per cent to S$3.70 in high volume for unknown reasons but has been weak since. It is due to release its Q3 results on Thursday. OCBC Investment Research said that it is expecting revenue to come in around S$4,400 million, supported by still-strong handset sales (but potentially mitigated by the weaker AUD against the SGD) and underlying net profit of S$945 million.

Banks all over the world have been weak in the past few months, with concerns focused mainly on those in Europe. Here, the three banks have come under pressure for several months now on concerns, among others, over their exposure to the weak offshore and marine sector.

In its Feb 4 Singapore Banks report, UBS Investment Research said that it thinks the risks to earnings are clearly to the downside if impairment charges rise, China slows and US growth disappoints.