Singapore Stocks-Down on losses in telcos, 3,000 support eyed

Reuters - Tuesday, September 7Send IM Story Print


* Index down 0.32 pct, seen in 3,000-3,042 range afternoon

* SingTel, StarHub and M1 drop on fears of new competition

* SingTel falls ahead of announcement on new Australia govt

By Charmian Kok

SINGAPORE, Sept 7 - Singapore shares dropped 0.32 percent, weighed by losses in telcom operators after a newspaper reported the government may allow a fourth mobile phone operator in the city-state.

By the midday break the Straits Times Index <.FTSTI> was down 9.73 points at 3,024.85. More than 131.8 million shares had changed hands.

"Singapore shares are likely to trade sideways later this afternoon, as there's little movement in U.S. futures so far. As the U.S. was on holiday yesterday, the STI is mainly taking its cues from Japan, which is down," said Carey Wong, an analyst at OCBC Investment Research.

The benchmark index is likely to trade with a downward bias in the 3,000-3,042 band, traders said.

Shares of Singapore's three telcom operators fell on Tuesday after the Business Times reported Singapore will auction another third-generation spectrum in November, paving the way for a fourth mobile phone operator. [ID:nSGE68601F]

Singapore Telecommunications was also hit by uncertainty ahead of the announcement of Australia's new government, which is expected later Tuesday.

SingTel shares fell 1.6 percent to S$3.06 with 10.5 million shares changing hands, StarHub dropped 2.8 percent, while M1 declined 1.3 percent.

"If the opposition party wins, this may be bad news for SingTel, as the new government may not spend as much on broadband infrastructure in Australia," said a local trader.

Australia's conservative opposition said last month it would scrap the current government's plan to build a high-speed broadband network if it won, which could have negative implications for SingTel's Australian unit Optus. [ID:nSGE67901G]

Singapore-listed casino operator Genting Hong Kong fell 3.4 percent to S$0.425 as investors pared holdings in the firm after its shares surged 47 percent over the last two trading sessions. [ID:nSGE68603U]

STI gains 0.4% to 2,938.74 at closing

Singapore’s Straits Times Index gained 0.4% to 2,938.74 at the close, pushing the gauge 0.1% higher this week. Two stocks rose for each that fell on the 30-member gauge.

Shares on the measure trade at an average 14.2 times estimated earnings, compared with about 17.4 times at the beginning of the year, according to Bloomberg data. The following shares were among the most active in the market. 

 

Kian Ann Engineering (KAE SP), a supplier of tractor and diesel engine parts, gained 2.6% to 20 cents. The company said full-year profit increased 15% to $13.2 million from a year earlier.

 

MCL Land (MCL SP) surged 26% to $2.45, its biggest advance on record, after its parent Hongkong Land Holdings (HKL SP) offered to buy the rest of the Singapore- based homebuilder for $2.45 a share. Hongkong Land, which holds about 77.4% of MCL Land, rose 1.5% to US$5.40 ($7.32).

 

Olam International (OLAM SP), a Singapore-based supplier of agricultural commodities, jumped 6.8% to $2.68. The company said fourth-quarter net income doubled to $92.3 million from $46.7 million a year earlier. Credit Suisse Group AG raised its share-price estimate to $4.25 from $3.50 and kept its “outperform” rating, saying the company’s earnings beat estimates.

 

Wilmar International (WIL SP), the world’s biggest palm-oil trader, rose 0.5% to $6.21. The company said its unit PGEO Group agreed to buy the remaining 8.6% of Natural Oleochemicals from National Land Finance Co-operative Society for 42.5 million ringgit ($18.3 million). PGEO last month acquired 91.4% of Natural Oleochemicals from Kulim (Malaysia) Bhd.