By Kevin Lim and Nimesh Vora
SINGAPORE (Jul 11) -- Singapore shares fell Tuesday, led by declines in Global Logistic Properties and Singapore Telecommunications. Malaysia stocks edged lower, led by banking stocks.
Global Logistic Properties slumped 6% after the Financial Times reported the proposed sale of the company a hit a snag over future control of its China assets. Warburg Pincus is worried over a 2014 deal that sold one-third of GLP's business to a group which includes chief executive Ming Mei and China's Hopu Investment Management, FT reported citing people familiar with the matter. The deal effectively provided the group a veto over what could be done with GLP's China assets, according to the report. Earlier this month, FT had reported that the GLP's proposed sale had attracted only two bidders and one of them was a group led by Mei and Hopu.
Index heavyweight Singapore Telecommunications fell 0.5% after pricing the initial public offering of its subsidiary NetLink NBN Trust near the bottom of the indicative price range. Singtel said late Monday that it will sell 2.89 billion units, or around 75% of NetLink, at S$0.81 per unit, which is at the lower end of the S$0.80 to S$0.93 per unit indicative range provided in the draft prospectus.
Singapore's FTSE Straits Times Index closed lower 0.9% to 3,218.80. Singapore Exchange slipped 0.5%, in line with broader market losses. The local bourse operator said that June total securities market turnover fell 16% month-on-month while total derivatives volume rose 6%. City Developments fell 1.5%, pacing declines in property stocks.
"We have seen the STI trending in a horizontal channel that certainly makes range-bound trade of between 3200 and 3260 a viable strategy of late," said Jingyi Pan, a market strategist at Melbourne-based brokerage IG. "Besides the retail sales which will be due on Wednesday, the key focus is certainly on the Q2 GDP numbers on Friday."
Yanlord Land Group, up over 30% this year, declined 0.8%. It said late Monday that its subsidiary will acquire investment holding company Greens Investments for 600 million yuan ($88 million). Greens Investment holds 60% interest in Zhuhai International Golf Amusement, which in turn owns 90% interest of Zhuhai International Golf Property Management.
The FTSE Bursa Malaysia KLCI fell 0.1% to 1,755.03. CIMB Group Holdings fell 2.1% and RHB Bank lost 1%, pacing decline in most banking stocks.
CIMB Investment Bank downgraded Malaysian banks to "neutral" from "overweight", citing negative impact from the adoption of new reporting standards MFRS 9 in 2018, expected slower profit growth, and less attractive valuations. The MFRS 9 will change provisioning methodologies from incurred loss to expected loss, leading to higher credit costs for banks, it said in a note.
"If we factor in the negative impact of 1.3%-8.3% from the adoption of MFRS 9, net profit growth would be reduced to 0.4%-6.4% in 2018, based on our calculations," CIMB said.
Petronas Chemical Group rose 1.5%, recovering more than half of the losses from Monday, amid speculation that a weak debut for its competitor Lotte Chemical Titan Holding leading investors to rotate to Petronas Chemical. Lotte Chemical Titan Holding closed at 6.38 ringgit on its debut on the main market as compared to initial public offering price of 6.50 ringgit. The IPO was the country's biggest in five years.
WCT Holdings dropped 6.7% after the construction engineering company said it had received a legal claim in Qatar totaling 181.57 million Qatari real ($49.87 million).
Careplus Group, up over 50% in 2017, fell 1.2%. The glove maker's chief executive said the company plans to spend 30 million ringgit ($6.98 million) annually for the next four years to nearly triple its production capacity to meet growing demand.
Investors await U.S. Federal Reserve Chair Janet Yellen's two-day testimony to Congress which starts Wednesday. Overnight cues out of the U.S were mixed with technology stocks helping Nasdaq Composite edge higher, while Dow Jones Industrial Average and the S&P 500 ended little changed.
- By Kevin Lim and Nimesh Vora; Kevin.Lim@nikkeinewsrise.com; +65 6331 6250
- Edited By Vipin Nair
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