Singapore Stocks-Down ahead of Fed speech; Tiger Air falls

SINGAPORE: Singapore shares slid around 0.7 percent by midday on Friday as investors grew more cautious ahead of a speech by Federal Reserve Chairman Ben Bernanke later in the day.

Rig builder Sembcorp Marine fell more than 3 percent as worries over an economic recession continued to weigh on the outlook for oil-rig demand.

At 0500 GMT, the Straits Times Index (STI) was down 0.7 percent, or 20.29 points, at 2,745.45. The total volume of shares traded by then was 679.8 million shares and turnover was S$632.1 million.

This compares with the volume of 754 million shares and turnover of S$825.3 million on Thursday. Local traders said they expect the STI to trade in 2,720-2,760 band for the rest of the session.

"Investors are growing more cautious and are starting to factor in the possibility that the Fed will not signal another round of quantitative easing," said Tey Tze Ming, a market strategist at Saxo Capital Markets.

Bernanke is due to address central bankers at an annual symposium in Jackson Hole, Wyoming.

His speech last year laid the groundwork for the Fed's $600 billion bond-buying program to revive the economy under the rubric "QE2" for the Fed's second round of stimulus, or quantitative easing.

"Asia will remain very rangebound ahead of Jackson Hole, but I don't expect a lot more downside today. It's quiet in the markets and investors are on the sidelines," Tey said.

Budget airline Tiger Airways fell as much as 5.8 percent after it said it would raise $132 million in a rights issue to shore up its capital.

By the midday, Tiger Air shares were down 3.7 percent at S$0.92 with 6.7 million million shares changing hands.

However, units of Hutchison Port Holdings Trust, which owns port assets, outperformed the broader market and rose 4.8 percent to $0.66, extending gains after traders said it was oversold and trading at attractive valuations.

"Fundamentally it doesn't deserve the valuations it's trading at now. Investors were pricing in negative growth next year, which I think is quite unlikely," said Suvro Sarkar, an analyst at DBS Vickers.

He said he expects Hutchison Port to deliver an attractive distribution yield of about 9-10 percent next year, and recommends investors to buy if it is trading below $0.80.

Qingmei, which makes sports shoe soles, rose 9.6 percent to S$0.205 after it reported strong quarterly earnings and announced an attractive dividend, traders said.

Copyright Reuters, 2010