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Singapore: ST Index slips in quiet, thin trading
THE main difficulty that dealers have faced for the past year is to find suitable adjectives to describe the local market - or at least adjectives which are printable. Such was the case again on Monday when the Straits Times Index (STI) drifted lower with little liquidity support, eventually closing a net 3.53 points weaker at 3,459.57 on volume of 1.7 billion units worth S$961 million.
A 0.8 per cent slide in Hong Kong probably contributed to the weakness, although the market there has enjoyed a massive rally lately and was due for a correction. A firm opening for Europe helped halve the STI's loss between 5pm and 5.05pm.
Whatever the case, dealers could find nothing flattering to say about local equities, many drawing envious comparisons with trading in China and Hong Kong where daily volume is usually much higher than in Singapore.
Still, there were situational plays here for traders to latch on to. Offshore and marine group Ezion Holdings, for example, saw its shares plunge S$0.055 or 4.6 per cent to S$1.13 on volume of 34.5 million after news reports in Bloomberg and The Straits Times that it is being sued by Atlantic Marine Services (AMS).
RHB Research Institute called a "buy" on Ezion, saying it sees parallels with an unfounded lawsuit against Yangzijiang Shipbuilding's chairman last year, during which the broker saw a mispricing amid the tumbling share price.
"That stock has since jumped more than 40 per cent. The negativity surrounding Ezion arising from this lawsuit presents a similarly good entry opportunity. Maintain BUY with an unchanged S$2.10 target price," said RHB.