By Yang Huiwen

THE local market extended declines for a sixth straight day, its longest losing streak since the market rout in January.

The benchmark Straits Times Index (STI) fell 34.25 points, or 1.51 per cent, to close at 2,237.2, its lowest level all day.

Banks and property developers all took a tumble. DBS Group Holdings dropped 18 cents, or 1.54 per cent, to $11.50 while OCBC fell 13 cents, or 1.92 per cent, to $6.65. United Overseas Bank fell 24 cents, or 1.67 per cent, to $14.10.

CapitaLand slumped 13 cents, or 3.58 per cent, to $3.50, while City Developments fell 13 cents, or 1.51 per cent, to $8.50.

Trading volume slumped further to its lowest level since April 29. Just 1.68 billion shares worth $1.59 billion changed hands.

'This pullback may bring the STI down to about 2,150, in line with average pullbacks in past cycles,' said Citigroup's head of Singapore research Chua Hak Bin.

'We view this market pullback as a buying window for the next leg up,' he said.

He added that while banks are 'typically outperformers at every phase of recovery cycle', property stocks tend to 'overshoot in early stage and underperform or even fall in late recovery phase'.

Other leading Asian markets also went backwards yesterday. Hong Kong's Hang Seng fell 1.7 per cent, while Tokyo's Nikkei-222 slid 1.39 per cent.

At home, a handful of mid- to small- cap firms were thrown into the spotlight.

Jaya Holdings, a shipbuilder and ship charterer, plunged by the most since its listing in March 1992 after it said it is facing difficulties in getting its lenders to roll over or extend existing credit facilities.

The stock plunged 23.5 cents, or 41 per cent, to 34 cents, with 71.85 million shares traded.

'Due to the current global economic climate, certain of the lenders of the company and its subsidiaries have indicated their intention to review the credit facilities extended to the group,' it said in a statement.

It will be negotiating with its lenders for a freeze of repayments owed to them, pending a restructuring of the group's operations and financial arrangements, it said. Jaya added that the group 'will continue to undertake its day-to-day operations and activities as normal'.

Yanlord Land also received much trading interest after it said it plans to raise $525 million by selling shares and convertible bonds, making it the largest dual offering of equity and convertible bonds in Singapore this year.

Its shares, the most actively traded with 145.5 million shares changing hands, lost three cents, or 1.3 per cent, to $2.28.

The new shares will be sold at $2.08 each, while the bonds are convertible into new Yanlord shares at $2.6208 per share.

Genting lost three cents, or 4.44 per cent, to 64.5 cents with 74.15 million shares traded.

Chinese shipbuilder Yangzijiang fell for the sixth straight day, losing half a cent to 76 cents, while Cosco Corp fell four cents, or 2.96 per cent, to $1.31.

'We believe shipyards are facing a prolonged industry down-cycle, and that current mid-cycle valuations assigned to Cosco and Yangzijiang are overly optimistic,' DBS Vickers said in a report.

This article was first published in The Straits Times.