THE Straits Times Index on Tuesday fell 29.53 points or one per cent to 2,841.94, a level not seen since June 2012.Weakness in China and Hong Kong that followed an overnight slump on Wall Street as well as a drop in the Dow futures contract that indicated a soft Tuesday for the US market all added up to weigh on sentiment here.
Turnover, however, was boosted significantly to 1.34 billion units worth S$1.5 billion by the crossing of 222 million shares of Olam International at S$2.75 per share. This was part of the 332 million shares to be issued to Japan's Mitsubishi Corp that was announced at the end of last month. Olam's shares on Tuesday rose S$0.015 to S$2 on a volume of 222.8 million.
The US Federal Reserve will hold its Federal Open Market Committee meeting on Wednesday and Thursday and markets have been unnerved for weeks by the possibility that an interest-rate hike could be announced.
In the commodities sector, shares of Golden Agri Resources (GAR) ended unchanged at S$0.31 on a volume of 22.9 million. Goldman Sachs in a Sept 14 Asean Agriculture report on plantations said it is cutting its 20015-2017 estimated crude palm oil (CPO) prices by 13-14 per cent. It said GAR's earnings are the most sensitive to lower CPO prices and export levies given the company's high production costs and called a "sell" with 12-month target of S$0.20.
"Furthermore, the new biological assets accounting standards from 2016 will result in higher depreciation, further driving EPS lower from 2016," it said.
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