The Worst Blue Chips This Year

StockMarketBoardThe Straits Times Index (SGX: ^STI) has gone almost nowhere in the first six of this year. It started 2013 at 3,167 points and clocked in six months later at 3,155 points Of the 30 shares that make up the benchmark index, there were 13 winners and 17 that lost ground.

CapitaLand (SGX: C31) was one of the heaviest fallers in the STI in the first half. It fell 17% to S$3.06, with most of the drop occurring between May and June. It would seem that the market has grown concerned over the outlook for property companies. The fears hinge on worries that the US Federal Reserve may gradually reduce its bond buying programme, which could push up interest rates. That could have implications for property developers, which depend on affordable loans. Interestingly, fewer developments could crimp supply, which in the face of strong demand for property, could push up rental yields. City Developments (SGX: C09), down 16% to S$10.71, was another notable faller amongst the blue chip in the first six months of 2013.

Commodity trader, Noble Group (SGX: N21) lost 16% of its value between 1 January and 30 June. Its shares slid from S$1.15 to S$0.97. In May, Noble Group posted a 62% drop in first-quarter profits. It said profits had been dragged down by losses at its agricultural unit. Meanwhile, the world’s second-largest palm oil company Golden-Agri Resources slipped 14% to S$0.56. The company posted a 30% fall in profits for the first three months of the year as crude palm oil prices fell 25%.

Jardine Cycle & Carriage (SGX: C07) was the fifth worst performer in the STI at the halfway mark. The motor retailer said profits fell 13% in the first quarter. Jardine C&C, which is exposed to Indonesia through its stake in Astra International, said a weaker rupiah had affected profits. It said Astra’s contribution was 13% lower than a year ago, even though automotive sales remained favourable. It expects Astra to face a number of challenges in the near term but commented it should continue to benefit from the continuing strength of the Indonesian economy.

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