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Three Shares That Lost To the Market Today

Despite having only 12 out of its 30 constituents end the day with gains while seeing 12 others make losses, the Straits Times Index (SGX: ^STI) still managed a slight 0.1% uptick to 3,265 points.

So while the index has had a mildly positive day, the same can’t be said for a number of shares outside Singapore’s stock market barometer. Let’s take a look at some shares that have lost to the market today.

Fabchem China (SGX: I54) has dropped by 5.3% to S$0.108. The explosive chemicals manufacturer had issued a profit warning last week where it warned shareholders that its “profit is expected to be materially lower” for its financial year ended 31 March 2014.

In May 2013, an unfortunate explosive accident had occurred in an explosives manufacturing plant in the Shandong province where Fabchem China is based. Even though the accident had nothing to do with the company, it had caused temporary factory closures and heightened regulations, thus adversely impacting the company’s business.

In addition, the company also pinned the blame for its profit decline on a slowdown in China’s economy and higher raw material costs. In particular, “lower economic growth in China has led to reduced mining and infrastructure activities,” and hence, lesser demand for explosives.

Shareholders would get a clearer picture of the extent of the damage to Fabchem’s income statement when the company hands in its financials “on or before” 30 May 2014.

After jumping by 12% from S$0.87 to S$0.104 yesterday, the plastics manufacturer Fu Yu Corporation (SGX: F13) has given back some of its gains with its shares down by 4.8% to S$0.099 today.

The company, which is selling for significantly less than its net-cash (total cash minus total debt) value, had just released its first quarter earnings last Wednesday. Fu Yu saw its quarterly revenue decline by 11.8% to S$59.5 million from year-ago levels. Meanwhile, quarterly profits of S$1.06 million a year ago had transformed into a loss of S$1.42 million. The company’s poor showing was mainly the result of lower orders from its Malaysian operations.

First Resources (SGX: EB5) has slid by 2.3% to S$2.52. The palm oil producer’s latest first quarter results, announced last Wednesday, saw profits slip by 29% year-on-year to US$45 million even though sales had improved by 1.9% to US$177.9 million.

During the quarter, the company had managed to increase its sales volume from its downstream refinery and processing segment due to an expansion in processing capacity. However, lower average selling prices for crude palm oil weighed heavily on First Resources, resulting in the profit decline. Despite being able to grow its profits consistently over the past few years – an anomaly within the palm oil industry – it seems like the vicissitudes of the palm oil industry are starting to catch up with First Resources.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn’t own shares in any companies mentioned.