Singapore Market’s Big Movers Of The Day

StockMarketBoard Last night, the US Federal Reserve made the decision to not taper their US$85b per month bond buying programme due to a weak economic recovery in the country. So, cheap money’s here to stay till the next big Federal Open Market Committee meeting.

The US markets did not react with much joy as the S&P 500 Index and Dow Jones Industrial Average closed the day with declines of 0.5% and 0.4% respectively.

Our local market in Singapore followed suit as the Straits Times Index (SGX: ^STI) dropped 0.6% to 3,211 points. Within the index’s 30 constituents, there were 20 shares that ended the day in the red compared to seven that had gains.

The biggest mover among the blue-chips was oil palm producer Golden Agri-Resources (SGX: E5H) with a 3.5% increase to S$0.60. Most of the index components had a pretty subdued day with the action taking place outside.

Let’s take a look at some big movers.

Sapphire Corporation (SGX: NF1) closed at S$0.112 for a 11.1% decline after issuing a profit warning yesterday evening for its upcoming third quarter earnings.

The specialty steel and vanadium products manufacturer had earlier notified investors during its second quarter earnings announcement that its performance for 2013 “would be hampered by dwindling steel prices and slower demand due to overcapacity issues in the overall China steel sector.”

These headwinds have indeed come home to roost and Sapphire announced in its profit warning yesterday that it will likely be recording a loss in the third quarter that’s even higher than the S$34.9m loss it suffered in the second quarter.

The company commented that it is “currently reviewing the business of its steelmaking operations in China” and that “the overall industry outlook is likely to remain weak.”

Yongnam Holdings (SGX: Y02) fell 9.4% to S$0.24 on similar circumstances to Sapphire Corp. The company, a structural-steel contractor and provider of civil engineering services, had announced yesterday that it is “expected to record an operating loss, notwithstanding a healthy increase in revenue.”

Yongnam cited two factors, 1) cost overruns from three on-going projects and 2) a non-recurring one-off loss on the sale of some fixed assets.

Despite the likely disappointment of a loss in the third quarter, the company still expects to report a profit for 2013, even though it is “expected to be significantly lower than” what it earned in the previous year. Yongnam made S$43.5m in profits in 2012.

Technology company CSE Global (SGX: 544) had a healthy 6.2% gain today to S$0.945. Back in August, it proposed an initial public offering of its wholly-owned subsidiary CSE Global UK Limited on the London Stock Exchange (LSE), subject to regulatory approval.

Yesterday evening, the company announced that there is now a firm intention to list CSE Global UK Limited, renamed Servelec Group, in the London markets. Applications will be made to join LSE and the admission is “expected to take place in early December 2013.”

CSE Global will be selling its entire stake in Servelec Group during the floatation, with more details to follow in due course.

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