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Sembcorp Marine Ltd Leads the Market Lower for the Week

Singapore’s stock market bellwether, the Straits Times Index  (SGX: ^STI), slipped by 0.36% during the week to end Friday’s trading session at 2,808 points.

Of the 30 index components, 18 had clocked a weekly loss, eight had made some gains, while the rest ended the week unchanged.

One of the 18 losers was Singapore Airlines Ltd (SGX: C6L). The airline’s shares came down by 1.0% to S$11.32 in the week.

During the week, it was reported that Singapore Airlines had increased its stake in the airline, Virgin Australia, from 22.9% to 23.1%. Singapore Airlines will be forking out A$3.2 million and the amount would be funded from internal sources. Singapore Airlines is the third-largest shareholder in Virgin Australia behind Air New Zealand, which has a stake of 25.9%, and Etihad Airways, which owns 25.1% of Virgin.

The index’s biggest loser in the week was Sembcorp Marine Ltd (SGX: S51). Shares of the oil rig builder had slumped by 3.1% to S$1.58. Sembcorp Marine will be announcing its financial results for the three months ended 31 March 2016  on 27 April.

2015 was a tough year for Sembcorp Marine – its revenue fell by 15% and it clocked a S$290 million loss. Headwinds In the oil & gas industry were cited as a major reason for the poor showing. It’d be interesting to see if Sembcorp Marine’s results for the first-quarter of 2016 will show any improvement. That may be tough to do though, as the price of oil is still subdued.

On the winning end of the Straits Times Index was property company City Developments Limited  (SGX: C09). The company,  which made the largest weekly gain among the 30 Straits Times Index constituents, saw its shares gain 3.1% in the week to close at S$8.40.

City Developments announced recently that it will be holding its Annual General Meeting (AGM) for the financial year ended 31 December 2015 on Wednesday, 20 April 2016. In 2015, the firm clocked revenue of S$3.3 billion, a decrease of 12.2% from 2014. But, net profit managed to inch up by 0.5% to S$773.3 million. The revenue decline was mainly due to a 34% drop in sales from the property development segment.

Outside the index, Ascendas Hospitality Trust  (SGX: Q1P) saw its units fall by approximately 10% in value to end the week at S$0.68. The stapled trust, as its name suggests, owns hospitality assets located across Asia, Australia, and New Zealand. In Singapore, it owns Park Hotel Clarke Quay. 

From the end of 2015 to March this year, there were separate announcements made that there was an “unsolicited expression of interest” to acquire the trust and that the trust’s managers were evaluating the proposals. However, on Tuesday, Ascendas Hospitality Trust revealed that “after evaluating the Proposals, the Managers have decided not to proceed with, and have ceased all discussions in relation to, the Transaction.” The market seemed disappointed as the trust’s unit price ended Friday at a level not seen since end-December 2015.

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, is now valued at 11.5 times trailing earnings and has a dividend yield of 3.6%.

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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 contributor Sudhan P doesn’t own shares in any companies mentioned.