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Singapore shares finish lower in low volume - again
IT'S difficult not to agree with trading representatives who claim that present market conditions are the worst in at least 20 years, not when turnover on Wednesday was a paltry 1.3 billion units worth S$734 million, when the Straits Times Index dropped 25.48 points to 2,828.57 and when a large institution such as HSBC Global Research announced earlier in the week it has stopped covering Keppel Corp, a bastion of the local market.
The average value per unit traded on Wednesday worked out to S$0.56, clearly pointing to where the market's trading energies were directed. Those who view the glass as being half full might view the lopsided interest in penny stocks as presenting opportunities for investors to discover undervalued gems; those who see the glass as half empty - and these would count among the vast majority - would say there is something fundamentally wrong if the market is led by poor quality issues.
As for Keppel, brokers pointed to a Tuesday flash note from HSBC that it is stopping coverage because of a reallocation of resources. "Our final target price is S$5.21 and final rating is Hold," said HSBC. "Yet another indication of how poor the interest is in local stocks," said a dealer. On Wednesday, Keppel lost S$0.07 at S$5.27 on volume of 2.96 million.
One house that still covers Keppel is Macquarie Equities Research (MQ). Macquarie Warrants (MW) in its Wednesday newsletter said that MQ has maintained a "neutral" rating on Keppel with S$5.80 target based on a sum of parts methodology.