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My Paper, "A few bright sparks in dour local market"

THE Singapore stock market woke up from two days of slumber yesterday, only to slump over 1 per cent as investors bailed out of the market after weak news from China and Wall Street.

Markets across Asia retreated after preliminary data showed that Chinese manufacturing activity has declined this month, for the first time in half a year.

Wall Street did little to lift the mood, as more companies announced sub-par earnings.

The local benchmark Straits Times Index fell 33.5 points, or 1.07 per cent, to 3,100.24.

Most Asian bourses fared little better. Tokyo dropped 0.79 per cent, Shanghai slipped 0.47 per cent and Hong Kong plummeted 1.51 per cent.

Mr Manpreet Gill, a Singapore-based senior investment strategist at Standard Chartered Bank, told Bloomberg: "Growth in China isn't going to pick up as the government is focused on rebalancing the economy and reducing reliance on credit.

"While Chinese equities look inexpensive, they lack catalysts. Ongoing reforms in China will be a key challenge for markets this year."

At home, newly listed Kim Heng Offshore & Marine was among the few bright sparks in an otherwise dour local market.

It rose a cent to 30.5 cents in its second day of trading after hitting an intraday high of 34.5 cents. The stock is now 22 per cent higher than its debut price of 25 cents.

Keppel Land was another outperformer, rising five cents to $3.31 after announcing on Wednesday that net profit for the fourth quarter had risen 7.6 per cent.

CIMB Research has maintained its "hold" call on the stock, with analyst Donald Chua saying in a note yesterday: "Its high-margin projects in Singapore are now complete. Short of acquisitions, its earnings profile is expected to be driven by China development sales. We see China housing headwinds building up again."

The Singapore Exchange dropped two cents to $6.98, after reporting on Wednesday that net profit for its second quarter fell 2 per cent from a year earlier.

Sats was flat at $3.21, after Maybank Kim Eng Research issued a report maintaining its "buy" call on the stock.

Analyst Derrick Heng wrote: "We remain positive on the stock as ongoing initiatives to drive productivity will better position Sats for the future.

"With demand for air travel in the region on the rise, the outlook for its aviation business is bright. Incremental contributions from its non-aviation business will also continue to provide stable income and enhance economies of scale for the group."