Singapore shares likely to face further downside risks today following the sell-off overnight in Wall Street, on risk-off sentiment ahead of several key economic indicators due later this week.
STI is now in bear market territory after losing 21% from its peak at 3,539 in Apr '15.
Commodity traders Noble, Olam and Wilmar may come into negative limelight, after commodities and mining giant Glencore plunged 30% overnight, on concerns that it is not doing enough to cut its debt to withstand a prolonged fall in global metals prices.
Regional bourses opened poorly this morning in Tokyo (-2.3) and Sydney (-2.8%). Seoul is closed today for Harvest moon Festival.
From a chart perspective, the STI look to trend lower towards the next support level at 2,700, underpinned by falling technical indicators and a bearish MACD crossover. Near-term resistance level is at 2,850.
Stocks to watch:
*Strategy: Fund manager Samsung Asset Management cited little value in Singapore shares even as the market is trading at the widest discount to global equities in more than a decade. The faltering growth in China and the prospect of higher US interest rates leave shares vulnerable to more losses.
*Sembcorp Industries: Marked its maiden foray into Bangladesh with the development of a 71%-owned 426MW power plant, which will cost ~US$390m and is expected to be completed by 2018. Power will be supplied to the national grid under a 22.5-year power purchase agreement with the government.
*Croesus Retail Trust: Acquiring Torius Property, a completed retail property in Fukuoka comprising 36 buildings for ¥7,997m ($95.2m), at a 3.7% discount to market value. To finance the acquisition, Croesus is proposing a renounceable rights issue of 114.2m new units on a basis of 22-for-100 at an issue price of $0.61 apiece.
*Olam: Intends to expand its African coffee farmland to 5,000 hectares from the current 2,200 hectares, without providing a timeframe. Olam's farms are in early phases of development and production has been limited so far.
*Huationg: Secured four earthwork contracts worth an aggregate $81.3m, expected for delivery over the next three years.
*Ezra: Norway's DNB Bank acquired a substantial stake in Ezra via off-market purchase of 207m shares at $0.12 apiece on 25 Sep, bringing its stake from zero to 7.04%.
*Travelite: Non-binding MOU with Dato’ Dr Tan Hian Tsin to purchase a 50% stake in apparel wholesaler and retailer, Singapore Crocodile (1968).
*Weiye: Proposed spin-off and listing of clean room and HVAC equipment business on Catalist.
*Ryobi Kiso: Secured $32.4m worth of contracts for foundation and geoservices, bringing the total new contracts secured since Jan 2015 to $88.3m.
*iX Biopharma: Granted Japanese patent for its WaferiX drug delivery technology, expiring in Oct ‘30. The grant follows its successful Phase 2 clinical trials for its Wafermine product.