Shareas lower at midday, dragged by Noble on demand concern

Singapore shares fell by midday on Thursday, dragged down by commodities trader Noble Group on worries about slowing demand amid a weakening global economy, and traders said the general sentiment is likely to remain cautious in the near term.

 

At 1:00 p.m., the Straits Times Index (STI) <.FTSTI> was down 0.4%, or 12.55 points, at 3,117.79. The total volume of shares traded by then was nearly 662 million shares and turnover was $694.7 million.

 

This compares with a volume of 990.1 million shares and turnover of $965.1 million at the same time on Wednesday. Local traders said support may kick in at around 3,095 points for the rest of the session.

 

Shares of Noble Group (NOBG.SI) fell as much as 3.9% after bigger rival London-listed Glencore (GLEN.L) slumped 7% on Wednesday.

 

At 1:00 p.m., Noble was down 3.1% at $1.75 with 28 million shares changing hands, around 1.3 times the average daily volume in the last 30 days.

 

“Noble is quite a direct proxy to the economy and there are concerns about the demand for commodities, especially energy and industrial commodities like coal and steel,” said James Koh, an analyst at Kim Eng Securities.

 

Singapore’s Oversea-Chinese Banking Corp (OCBC.SI) fell after missing street forecasts for its April-June quarterly profit on higher staff costs and bad debt charges. 

 

At 1:00 p.m., OCBC shares were down 1.6% at $9.72 on a volume of 3.5 million shares. In comparison, rivals United Overseas Bank (UOBH.SI) was 1.1% lower and DBS (DBSM.SI) retreated 0.1%.

 

CIMB Research said in a report that OCBC trades at a price-earnings ratio of 13 times for 2011, the most expensive of the three Singapore banks. It downgraded OCBC stock to neutral from outperform “on the back of the weak results and lofty valuations”.

 

However, Singapore-listed Hutchison Port Holdings Trust (HPHT.SI), which owns port assets, outperformed the broader market after its financial results beat its own forecast as better cost savings offset softer revenue.

 

At 1:00 p.m., Hutchison Port was up 3.4% at US$0.76 on a volume of 32.9 million units, the top traded counter by volume so far. But Citi said it expects weakened end-consumer demand in the U.S. and Europe through the year-end and cut its target price on Hutchison Port to US$0.63 from US$0.78.