Source: The Straits Time           Author: Jonathan Kwok          Date: 21/10/10

THE Singapore market did an admirable job of damage limitation yesterday as it clawed back much of the losses from an early session sell-down.

The local bourse faced an uphill battle right from the outset after a shock move by China on Tuesday evening to raise key interest rates by 0.25 percentage point. Many Western investors were spooked by the move, which sent Wall Street sliding 1.48 per cent in overnight trade.

Singapore’s Straits Times Index (STI) rapidly headed south too, falling about 1 per cent as soon as the opening bell rang.

But by late morning, it had recovered significantly as bargain hunting kicked in. Small-scale intra-day rebounds in the Shanghai and Hong Kong markets also convinced some investors that there was no need for undue worry.

In the end, the STI closed at 3,179.15, down 13.14 points, or 0.41 per cent, having recovered more than half the losses it suffered at the opening bell.

Banks led the losers, with DBS Group Holdings falling 24 cents to $14.48, United Overseas Bank dropping 32 cents to $18.58, and OCBC Bank losing 10 cents to $9.10. The trio accounted for most of the STI’s fall, shaving a combined 11.44 points off the index.

Commodity players also endured a negative session as market players fretted that the cooling measures could affect growth in China, a mega consumer of many commodities. Golden Agri-Resources dipped 1.5 cents to 67 cents, Noble Group fell three cents to $1.91, Olam decreased seven cents to $3.17 and Wilmar International lost one cent to $6.28.

Better-than-expected quarterly earnings allowed some firms to defy the general market downtrend. Lifestyle products firm Osim International rose four cents to $1.09, after reporting an 86 per cent jump in third-quarter net profit.

‘We have raised our earnings’ estimates…to take into account higher margins arising from a better product mix, economies of scale, and improved profitability in Osim’s GNC Australia business,’ said DMG & Partners Securities, which raised its target price to $1.57 from $1.32 and kept its ‘buy’ call.

Shipping firm Neptune Orient Lines rose seven cents to $2.13, after recording net profit of US$282 million (S$369 million) for its third quarter ended Sept 17, reversing a loss from a year earlier. ‘We believe steady profitability will not be an issue for the (container) sector in the near to medium term,’ said DBS Vickers, which kept its ‘buy’ call and raised its target price by 10 cents to $2.50.

CapitaRetail China Trust inched up one cent to $1.25. The firm had announced early yesterday that net property income for its third quarter rose 9.1 per cent, and that distribution per unit for the quarter was up 3 per cent.

Genting Singapore knocked Global Logistic Properties (GLP) off the top of the most actives list. Some 224 million of the casino operator’s stock changed hands as it rose 11 cents to $2.26.

GLP, the most active on Monday and Tuesday, came in second with 107.6 million shares. The counter backtracked three cents to $2.26, reversing some gains from its first two days of trading action.

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