SINGAPORE (Thomson Financial) - Singapore shares were lower at midday on Thursday as investors, worried about softening global economic growth, ignored gains on Wall Street overnight and a continued decline in crude oil prices.
'Global economic growth is likely to slow in 2008 and again in 2009, reflecting the lagged effects of higher interest rates, the credit squeeze and higher food and energy prices,' said Tony Dolphin, director of economics and asset allocation at London-based Henderson Global Investors.
'There is a risk that as the slowdown becomes synchronised, it deepens into a global recession,' he said in a note to clients.
At midday, the benchmark Straits Times Index was down 58.67 points or 2 percent at 2,828.11.
Decliners led gainers 363 to 87, with 930 stocks unchanged.
There were 631.8 million shares traded, valued at S$774.1 million.
Signs of weakening corporate earnings also weighed on investor sentiment.
Neptune Orient Lines, which made a bid for German rival Hapag-Lloyd, warned its business will be much more difficult in the second half of 2008 after it posted a 19 percent fall in profit due to tough conditions and higher fuel costs.
NOL, 66 percent-owned by Singapore sovereign fund Temasek Holdings, said on Thursday its net profit for the April-June period fell 19 percent to $76 million. Its shares were down 7.6 percent to S$2.54.
Shares of COSCO Corp, a China-based shipbuilder and shipping company, slumped 12.2 percent to S$2.37 on news of its president Ji Hai Sheng's shock exit.
'A new and sudden change in a key management role does not bode well in this weak investor climate,' said DMG & Partners analyst Serene Lim. 'The share price is likely to be pressured, at least in the near term.'
Property stocks were lower, with CapitaLand down 3 percent at S$5.10, City Developments down 3.5 percent at S$10.56, and Keppel Land 3.1 percent lower at S$4.42.
Investors were cautious ahead of the release of quarterly earnings by DBS Group and Oversea-Chinese Banking Corp. The results, released after the end of the morning session, showed DBS beating estimates and OCBC missing the forecasts.
OCBC fell 1.2 percent to S$8.30. Singapore's smallest lender posted a 20 percent drop in quarterly profit, missing market forecasts, as turmoil in global markets hurt fee income and pushed down earnings at its insurance business.
DBS Group fell 1.5 percent to S$18.46. Southeast Asia's biggest lender posted a 16 percent rise in quarterly profit, beating market expectations by a wide margin, as fast loan growth helped offset the damage from market turmoil.
United Overseas Bank was down 0.5 percent at S$19.92.
Singapore Exchange was down 2.2 percent at S$6.69. The bourse operator will report its full year to June results after the market close today.
Shares in industrial conglomerate SembCorp Industries tumbled 4.3 percent to S$4.28 after the company warned on Wednesday that its business will be more difficult in the second half of 2008, as it posted a 19 percent fall in quarterly profit.
StarHub, the second largest telecommunication company in Singapore, slid 3.9 percent to S$2.69 after reporting lower-than-expected second-quarter earnings on Wednesday. Deutsche Bank has cut its price target for StarHub to S$3.30 from S$3.60 and kept its 'buy' rating on the stock.
Among other blue chips, Singapore Telecom was down 0.8 percent at S$3.53 and Singapore Airlines eased 1.0 percent to S$15.26.
($1=S$1.37)
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