Singapore shares close weaker on US rate, global growth worries

THE Straits Times Index fell continuously this week as worries mounted over the impact a December US interest rate hike would have on a slowing global economy.

Friday's session - which incidentally took place on Friday the 13th - saw the STI shed 33.33 points or 1.1 per cent at 2,925.68, which brought the loss for the week to 85 points or 2.8 per cent. All throughout, liquidity was weak and largely focused in the 30 STI components. On Friday, the whole market traded 1.4 billion units worth S$1.1 billion of which 365 million units worth S$744 million came from the index members.

Brokers said apart from US rate hike worries, third quarter earnings have not beaten expectations and have been largely underwhelming.

For example, Friday's most active stock was STI component Noble Group which said its chief financial officer was stepping down because of health reasons and reported an 84 per cent drop in Q3 earnings to US$24.7 million. The counter dropped S$0.055 or 11 per cent to S$0.445 on volume of 122 million.

Another STI stock, Genting Singapore, dropped S$0.035 to S$0.78 on volume of 46 million. Nomura in a Nov 13 report said it estimates the stock is trading at about 11x EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation) at a premium to mature market multiples of 9- 10x which is supported by share buybacks.