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STI plunges over 100 points in volatile half-day trading
Alvin Foo Thu, Feb 07, 2008 The Straits Times
GIVEN the recent market mayhem, it was probably too much to expect a quiet, uneventful half-day trading session yesterday, ahead of the long Chinese New Year holiday weekend. But few could have anticipated the scale of the market rout that unfolded. Wall Street's 370-point overnight plunge - its worst in nearly a year - sent Asian markets into a pre-holiday tailspin, and Singapore was not spared the carnage that ensued. A sea of red, ironically also the festive colour, engulfed the Straits Times Index (STI) as it dived 106.4 points, or 3.5 per cent, to 2,932.02.

The sharp fall was triggered by fresh fears of a United States recession that now seems increasingly inevitable, after the release of weak economic data the night before.

CIMB-GK research head Song Seng Wun said yesterday: 'Even as we enjoy our reunion dinners tonight, we'll also worry what the wind may bring us in the next few months.

'Until we have an idea of how bad the US slowdown will be, we'll still get this kind of whiplash.'

Index heavyweights bore the brunt of the selldown, with banking stocks in particular taking a beating.

DBS Group Holdings dived 58 cents to $17.02. United Overseas Bank fell 54 cents to $17.58, while OCBC Bank dropped 25 cents to $7.30.

SingTel remained in the spotlight, a day after it announced a better-than-expected set of third- quarter results.

However, the counter was badly hit by the bears, dropping 19 cents to $3.71 and alone accounting for an 18-point dip in the STI.

Despite yesterday's selldown, analysts remain hopeful of the telco's long-term prospects.

OCBC Investment Research upgraded SingTel from 'hold' to 'buy'. It noted: 'Due to the better operational performance, we have also revised up our fair value from $3.91 to $4.35.'

Other badly bruised blue chips included Singapore Exchange, which plunged 60 cents to $9.26 to be the STI's top loser, and Keppel Corp, which retreated 44 cents to $10.16.

Despite the overall bloodbath, there was some joy for two counters.

Chinese steelmaker Delong Holdings continued its charge, as investors are increasingly hopeful that it may be a takeover target.

It added another 31 cents, or 15.6 per cent, to $2.30 to be the day's top gainer, after surging 30.9 per cent the day before.

The firm said that its major shareholder has been approached by certain parties concerning a possible share sale.

There was also joy for Chinese pharmaceuticals firm AsiaPharm Group. It jumped 6.5 cents, or 10.2 per cent, to 70 cents following news of a takeover bid on Tuesday.

Overall, the selldown was less pronounced among the second- and third-liners.

The FTSE ST Mid Cap Index dropped 2.3 per cent to 765.84, while the Small Cap Index dipped 1.1 per cent to 673.82.

alfoo@sph.com.sg