On the day chart, STI has retreated back to the small consolidation top it burst out from 6 sessions ago after closing outisde of its rising wedge yesterday. When bearish mometum follows through, STI would test its 10-day low at 2511.
2,551.920 -45.93 (-1.77%)
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STI down 1.77% on Tuesday as S'pore extends partial lockdown by 4 weeks
21 Apr 2020 17:36
By Marissa Lee
THE Straits Times Index (STI) closed down 45.93 points or 1.77 per cent at 2,551.92 on Tuesday, as punters braced for bad news on the back of the 4pm announcement by Prime Minister Lee Hsien Loong that he would address the nation at 5pm.
When he did, he announced a four-week extension of the "circuit breaker" partial lockdown measures to June 1.
About 1.63 billion securities worth S$1.47 billion changed hands on Tuesday. Losers outnumbered gainers 341 to 111.
The most active counter was Biolidics, which recently got permission to market and sell its Covid-19 rapid-test kits in the US. It jumped 40.79 per cent or 15.5 cents to S$0.535.
Sevak was the top gainer, rising 11.33 per cent or S$0.17 to S$1.67. Jardine Matheson was the top loser for the second day running, falling 2.10 per cent or US$1.08 to US$50.40.
The market was especially bearish after May futures contracts for the US crude oil grade West Texas Intermediate (WTI) turned negative for first time, as the Saudis mounted a squeeze on US shale oil producers.
This is the first time that WTI has traded at less than half the price of Brent, but Bank of Singapore currency strategist Sim Moh Siong noted: ?The WTI oil market is a reflection of the supply glut in Cushing, not a reflection of the international oil market, which more closely follows Brent crude. Additionally, unlike Brent, the WTI contract is settled through physical oil delivery. We continue to project Brent crude price to rebound to US$45 per barrel in a year?s time.?
The market is also weighing the fallout from the oil rout, not just of oil and gas players, but their counterparties, whose collateral may be worth a lot less than before.
In a report last Friday, UOB Kay Hian analyst Jonathan Koh estimated that DBS Group has a S$400 million exposure to Singapore's insolvent oil trader Hin Leong: "Management disclosed that DBS? exposure to offshore-support vessels is currently at S$3 billion, which is half the S$6 billion at end-2016."
He said he expects DBS's net profit to fall by 25 per cent in the first quarter from the year-ago quarter when it reports on April 30.
He is also expecting DBS to trim dividends by 9.1 per cent to 30 Singapore cents per quarter, supported by reactivating its scrip dividend scheme, he wrote: "We expect a surge in credit costs to 60 basis points (2019: 18 basis points), driven by higher general provisions... caused by a deterioration in macroeconomic variables, and more loans downgraded from stage 1 to stage 2, which requires more provisions based on lifetime expected credit loss... We have assumed new non-performing loans of S$971 million during the quarter (Q419: S$575 million)."
Regional markets were awash with red. The Hang Seng and KLSE were both down 2.22 per cent.
Source: Business Times Breaking News
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