Singapore shares slip as weak China data hits Asian markets

Singapore shares slip as weak China data hits Asian markets

SINGAPORE, June 5 - Singapore shares tracked losses in regional markets, as data from China showing a slowdown in its services sector dampened market sentiment, while Frasers Centrepoint Ltd extended losses after announcing a surprise bid for an Australian firm.

The main Straits Times Index was down 0.2 per cent at 3,276.12, while MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 per cent.

HSBC/Markit's measure of China's services sector dropped to 50.7 in May from April's 51.4, raising questions on whether Beijing needs to do more to put a floor beneath growth.

Frasers Centrepoint continued to fall for a second day after the property developer made a surprise A$2.6 billion ($2.41 billion) cash takeover bid for Australand Property Group , trumping an offer from Australian firm Stockland Corp Ltd SGP.AX. Shares of the company were down 2.4 per cent at S$1.81.

CIMB maintained its "add" rating on the stock with a target price of S$2.09, saying the deal makes strategic sense though it has a slightly negative financial impact. The brokerage said it would revise its rating if a bidding war occurs and Frasers Centrepoint significantly overpays for Australand.

Among other stocks, shares of semiconductor packaging firm Stats Chippac Ltd dropped 7.3 per cent to S$0.57 after soaring as much as 25.5 per cent on Wednesday.

In response to a trading query from the bourse, Stats Chippac said it had been approached by other parties about a possible acquisition of the company after it announced an expression of interest from a third party in mid-May.

Bucking the trend, W Corporation Ltd jumped 7.4 per cent, stretching gains into a third straight session after announcing a S$490.9 million ($391 million) reverse takeover by e-commerce firm YuuZoo on Tuesday.

Many penny stocks were actively traded. Blumont Group Ltd, LionGold Corp Ltd and Asiasons Ltd, three companies at the centre of a penny stock crash in October, saw trading volumes run up as much as 5 times versus their 30-day average. Shares in Blumont, LionGold and Asiasons were up 9.7 per cent, 4.7 per cent and 16.7 per cent respectively.

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