Wed May 30, 2012 12:52am EDT
Singapore shares were lower at midday following two day of gains, easing on growing fears over Spain's banking and fiscal problems and on indications that China may take a cautious approach to further economic stimulus.
The benchmark Straits Times Index was down 0.3 percent at 2,793.49, though above an intraday low of 2,779.31.
DBS Vickers, which sees support for the STI at 2,780, said equities are oversold and may see a short-term bounce triggered by short-covering ahead of the Greece election on June 17.
Commodity firm Noble Group Ltd bucked the trend to rise 1.8 percent to S$1.135, on a favourable earnings outlook and a sharp fall in its share price that has pushed the stock to an attractive level on a technical basis.
Noble shares have fallen about 18 percent since the start of April, compared with a 7 percent fall for the STI in the same period.
"Some foreign houses are adding long positions for Noble as their shares look oversold at current levels," said a local broker.
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1236 (0436 GMT)
(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)
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12:03 STOCKS NEWS SINGAPORE-Buy rigbuilders in selldown-Nomura
The recent sell-down in equities offers a good chance to increase weightings in Singapore oil rig builders such as Keppel Corp and Sembcorp Marine, Nomura said.
The broker kept its buy rating on both companies, and has a target price of S$13.80 for Keppel and S$6.08 for Sembcorp Marine. Curent levels are S$10.14 and S$4.50, respectively.
Shares of Keppel, the world's largest rig builder, and smaller rival Sembcorp Marine have risen about 9 percent and 17 percent respectively so far this year.
However, Sembcorp Marine plunged 12 percent and Keppel lost 8 percent this month alone a mid a global flight from riskier assets, worse than the benchmark Straits Times Index's 6.6 percent loss.
"While new order momentum may slow in the coming quarters, given macro headwinds and weaker oil prices, we believe underlying long-term demand for offshore exploration and production remains robust," Nomura said.
It highlighted that the industry would benefit from the recent new oil discoveries, while the move to deeper waters and frontier drilling is expected to support demand for high-specification rigs.
1056 (0256 GMT)
(Reporting by Leonard How in Singapore; leonard.how@thomsonreuters.com)
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10:40 STOCKS NEWS SINGAPORE-OCBC cuts Olam target price
OCBC Investment Research lowered its target price on commodity company Olam International Ltd to S$1.86 from S$2.24, saying growing uncertainty in Europe may continue to cause increased volatility in commodity stocks.
Shares of Olam were down 0.9 percent at S$1.68. They have fallen about 21 percent so far this year, underperforming the Straits Times Index's gain of 5 percent in the same period.
Olam said on Tuesday it would invest $240 million in its first sugar milling asset in Brazil, Usina Acucareira Passos S.A.
OCBC, which maintained its hold rating on the stock, said Olam's management believed the latest acquisition was part of its plan to boost its milling assets in large sugar-producing countries that have a cost advantage.
However, the broker also noted that Olam expects sugar prices to continue to fall into the fourth quarter of the year, driven by the sugar surplus, but that prices should eventually bottom out before the mill reaches a steady state of production in fiscal 2016.
For company statement, click.
1019 (0219 GMT)
(Reporting by Leonard How in Singapore; leonard.how@thomsonreuters.com)
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10:21 STOCKS NEWS SINGAPORE-Biosensors up after earnings
Shares of medical device maker Biosensors International Group Ltd rose as much as 2.7 percent after it posted better-than-expected fourth-quarter earnings.
Biosensors said net profit for the quarter rose 49.5 percent to $27.2 million, helped by a surge in sales and revenue from licensing and royalties.
"(The) results exceed management's guidance. After investors' initial overreaction to price reduction fears in China, bargain valuations have emerged," said CIMB Research, which has an outperform rating on the stock.
However, it cut its target price on Biosensors stock to S$1.82 from S$1.98, citing lower margin assumptions due to weaker average selling prices.
Biosensors shares were up 0.4 percent at S$1.29, outperforming the FT ST Mid Cap index's 0.4 percent fall. The stock has fallen nearly 10 percent since the start of the year, against the index's 10 percent gain.
OCBC also lowered its target price for Biosensors to S$1.88 from S$1.92, but kept its buy rating.
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1000 (0200 GMT)
(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)
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08:46 STOCKS NEWS SINGAPORE-Index futures down 0.6 pct
Singapore index futures were down 0.6 percent on Wednesday, indicating the benchmark Straits Times Index is likely to fall.
Asian shares slipped on Wednesday, hurt by fears that Spain's banking woes will push up the country's borrowing costs to unsustainable levels although falls were limited on hopes that Greece would stay in the euro zone and for China stimulus steps.
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(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)
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