Unfazed by Nodx slump, shares rise 0.1%

Judging from Singapore's non-oil domestic exports (Nodx) reading for June, the global tech manufacturing slowdown is certainly weighing heavily on the economy.

But yesterday, investors appeared mostly unfazed, with the local benchmark little moved for most of the day with the exception of a late bump-up.

The Straits Times Index (STI) closed up 4.84 points or 0.14 per cent at 3,364.87.

Non-oil domestic exports fell 17.3 per cent year on year in June, more than the Bloomberg consensus median estimate of a 9.6 per cent contraction.

This follows last Friday's disappointing advanced estimate for Q2 economic growth, which clocked in at 0.1 per cent year on year.

That the market was little affected did not surprise observers.

"I don't think there is much of a shock factor to weaker data as it's been priced in," Vanguard Markets managing partner Stephen Innes told The Business Times.

That said, ING Asia economist Prakash Sakpal explained that the dip in exports "raises the odds of the Monetary Authority of Singapore (MAS) easing monetary policy well ahead of the next scheduled semi-annual policy review in October".

"We continue to expect easing either this month or next via a reduction or even flattening of the slope of the MAS' policy trading band for the Singapore dollar nominal effective exchange rate," he added.

In Singapore, trading volume clocked in at 1.04 billion securities, 87 per cent of the daily average in the first six months of this year. Total turnover came to $1.05 billion, in line with the January-to-June daily average.

Across the broader market, decliners beat advancers 199 to 191. The benchmark index had 12 of the STI's 30 components in the red.

Yangzijiang Shipbuilding, which fell $0.02 or 1.3 per cent to $1.50, was the benchmark index's most active counter with 29.5 million shares changing hands.

On Tuesday after market close, the shipbuilder revealed that it had taken up a 55 per cent stake in Odfjell Terminals Jiangyin for US$46.2 million (S$63 million), funded by internal resources.

DBS Equity Research analyst Ho Pei Hwa noted that the deal is in line with Yangzijiang's move into clean energy.

DBS has maintained its "buy" recommendation and target price of $1.82 on the shipbuilder after the acquisition.

With earnings for Singapore real estate investment trusts (Reits) underway, STI constituent CapitaLand Commercial Trust ($0.01 or 0.5 per cent down at $2.17 on a cum-dividend basis) announced yesterday morning its Q2 results. A 0.8 per cent increase in net property income to $78.4 million was recorded for the quarter ended June 30 and distribution per unit was up 1.9 per cent to 2.2 cents, thanks to higher revenue from its properties.

The Reit also acquired a 94.9 per cent interest in a freehold office building in Frankfurt from its sponsor CapitaLand and Lum Chang Holdings based on an agreed property value of €265 million (S$407.8 million) on a 100 per cent basis.

There was a flurry of activity towards the end of yesterday's session on the Sembcorp Marine counter, which surged 7.1 per cent between 4pm and 4.20pm, more than any full-day gain since Dec 3, 2018, which drew a query from the Singapore Exchange.

The counter eventually closed at $0.11 or 7.9 per cent up at $1.51 on 21.3 million shares traded, of which just 1.1 million were exchanged before 4pm.

Elsewhere in the Asia-Pacific, markets were mostly lower due to fading optimism surrounding US-China trade talks. China, Hong Kong, Japan, Malaysia and South Korea all finished lower. Australia bucked the trend, thanks to a lift from mining firms and financials.

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