Shares dip at midday on uncertainty but downside limited

Singapore shares fell by midday on Tuesday after Wall Street closed down as a short rally following Osama bin Laden’s death gave way to long-term doubts about the global economy.

By the lunch break, the Straits Times Index (STI) <.FTSTI> was down 0.74%, or 23.46 points, at 3,156.40. The total value of shares traded in the morning session was $682 million, lower than $905.5 million last Friday.

Local traders said support may be around 3,150 points when trading resumes. The Singapore market was closed on Monday. 

 

Shares of oil rig builders Keppel Corp (KPLM.SI) and Sembcorp Marine (SCMN.SI) lost 1.7% and 1.4%, respectively. Palm oil stocks Golden Agri Resources (GAGR.SI) and Indofood Agri (IFAR.SI) retreated 1.5% and 2.9%, respectively.

 

“(The STI may be reacting to) what happened in the U.S. last night and also the news that Osama was killed,” said Carey Wong, an analyst at OCBC Investment Research.

 

“There are worries of reprisal and this is making the market a little bit cautious...Growth in the U.S. is not exactly that strong though corporate earnings are slightly better than expected,” he added.

Singapore-listed commodities firm Noble Group (NOBG.SI) said on Monday South Korean sovereign wealth fund Korea Investment Corp (KIC) had acquired slightly over 1% in the company through a purchase from the owner. 

 

At midday, Noble shares were down 2.7% at $2.17 with 10.8 million shares changing hands.

 

“If their trading network expands and they are able to secure more strategic assets in Korea, then it will be positive, although the impact is probably minor because in terms of size, the trade to Korea is quite small,” said Eugene Ng, an analyst at UOB Kay Hian.

 

“I think it’s not so much reaction to the news, it’s more because generally the market is down,” he said of Noble’s share price performance.

 

Shares of Singapore’s Courage Marine (CRMG.SI) fell as much as 10.8% after the dry bulk shipping firm said it expects to report a loss for the first quarter ended March 31, 2011, compared with a profit a year earlier.

 

At midday, Courage Marine shares were trading at $0.165 on a volume of 1.6 million shares.