Stocks down on Saudi concerns; palm oil firms off early lows

Singapore stocks slid 0.78% by Friday’s midday break, following the regional trend, as spreading unrest in Saudi Arabia and weak U.S. economic data hurt confidence.

Palm oil firms such as Wilmar International (WLIL.SI) and Golden Agri-Resources (GAGR.SI) fell on expectations that rising global stocks of vegetable oils would depress prices, but were off their early lows by midday.

 

By the lunch break, the Straits Times Index (STI) <.FTSTI> was down 23.91 points at 3,051.53. The total value of shares traded in the morning session was $669.2 million, up from $570.6  million on Thursday.

 

“We’ve seen more uncertainty arise from the situation in Saudi Arabia, which will become a really big issue if tensions there get worse,” said Terence Wong, co-head of research at DMG & Partners.

 

Traders said they expect the STI to find support at 3,050, with upside capped at 3,065 in the afternoon.

 

However, Wong said he sees good buying opportunities if the equity market falls further, and favours the agriculture, construction and oil and gas sectors.

 

“We think palm oil prices will go down this year, as more supply is expected to come onstream with production recovery significantly underway in the second half,” said Wong.

 

Shares of Golden Agri fell 1.5% to $0.66, with more than 56 million shares changing hands.

 

Indofood Agri Resources (IFAR.SI) tumbled 3.5% to $2.20, while larger rival Wilmar dropped 1.3% to $5.22.

 

Malaysian crude palm oil futures tumbled to a two-week low on Thursday as traders unwound positions on signs of slowing demand.  

 

However, the world’s largest oil rig builder Keppel Corp (KPLM.SI), outperformed the broader market to rise 0.85% at $11.92, after it said late on Thursday that it had won two contracts worth $170 million.  

 

Swiber Holdings (SWBR.SI) also bucked the trend, rising 1.9 percent to $0.825 after it said it had clinched a US$125 million ($159 million) contract to lay oil pipelines.