Singapore shares close weaker on soft oil prices, weak Wall Street

THE Straits Times Index on Tuesday slumped 24.89 points or 0.86 per cent to 2,876.03 in response to an overnight slide on Wall Street and large falls in Hong Kong, Japan and China.

The trigger for the selloff in the US was a steep fall in oil prices to their lowest since Feb 2009 and which put pressure on related stocks here like Keppel Corp, SembCorp Marine, Ezra and Ezion.

Turnover amounted to 991 million units worth S$913 million, an improvement over Monday's weak S$759 million, partly because of the contribution of Neptune Orient Lines which resumed trading after a one-day halt. Excluding warrants, there were 108 rises versus 276 falls.

SembCorp Marine which last week issued a profit warning that prompted brokers to recommend a "sell", ended S$0.06 weaker at S$1.82 on volume of 2.6 million. RHB said it is now upgrading the stock to "neutral" on valuation grounds with a S$1.81 target price.

"Even though the news has been negative, we note that SembMarine now trades at 1.38x P/BV, below the 2008 low of 1.9x and nearing the minus 2 standard deviation mark... As the stock has fallen 26 per cent since Oct 23 and now trades at unprecedented P/BV lows, we upgrade the counter..."

All eyes were on trading of Neptune Orient Lines (NOL), which is the subject of a takeover-cum-privatisation bid by France's CMA CGM at S$1.30 per share. The counter resumed trading on Tuesday but dipped S$0.005 to S$1.22 on volume of 70.2 million.

Traders said the discount was likely because there are still around six months to go before the deal can be wrapped up, during which time anti-trust clearances from various countries will have to be obtained.