SINGAPORE - Shares in Singapore fell in tandem with most regional indices, with investors cautiously waiting on the upcoming Federal Reserve meeting that is taking place over the next two days. Fed officials are widely expected to hold interest rates at their current level.
The Straits Times Index (STI) was 0.7 per cent or 22.64 points lower at 3,240.75 points.
Gainers beat decliners across the broader market 256 to 253, with 1.1 billion securities worth $888.92 million transacted.
Mr Tan De Jun, assistant manager of the research & portfolio management team at FSMOne.com, pointed out that investors could be nervous that the Fed will do something “unexpected”.
Several counters in the oil and gas sector are riding the rising oil price wave amid higher demand and output cut, bucking the decline in the STI. At least three oil exploration and production stocks Rex International, RH Petrogas and Interra Resource benefitted.
Rex International share price rose 9.6 per cent to $0.205 and RH Petrogas shares were up 2.4 per cent to $0.215, as the two continued their ascent since bouncing off the lows in August. Interra Resource share price increased by 5.9 per cent to $0.036.
A higher for longer oil price environment would continue to persist, FSMOne.com’s senior research analyst Chloe Nadia Halim believes, especially as the oil and gas sector is underinvested. This is a persistent problem that is difficult to change, with investment on a downward trend since 2014.
Added Ms Halim: “Besides benefiting exploration and production companies, this higher for longer oil prices could result in increased investments in offshore vessels from oil and gas companies, and could benefit players such as Yangzijiang Shipbuilding and Seatrium over the longer term.” THE BUSINESS TIMES