Singapore index inches down; Sembcorp Marine hits 6-week low
SINGAPORE May 5 (Reuters) - Singapore shares edged lower on Monday, dragged down by losses in Sembcorp Marine Ltd which hit a six-week low after posting lower-than-expected first-quarter earnings.
The benchmark Straits Times Index was down 0.2 percent at 3,245.69 by 0506 GMT. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3 percent.
Shares of Sembcorp Marine fell 2.5 percent to an intra-day low of S$3.96, their lowest since March 21, after the offshore drilling rig builder posted a 3.1 percent increase in first-quarter net profit, which nonetheless undershot market expectations.
CIMB downgraded its rating on Sembcorp Marine to "hold" and cut its target price to S$4.30 from S$5.10, citing a shortfall in ship repair and rig building revenue.
"Though 1Q is a seasonally weaker quarter, we believe subsequent ramp-up may not be as strong as we had expected," the brokerage said in a research note.
"The sluggish shipping market may cap volume growth in ship repair."
The index was also weighed down by losses in the real estate sector. Losses were led by Global Logistics Properties Ltd and City Development Ltd which fell 1.4 percent and 0.5 percent, respectively.
Among other stocks, Tiger Airways Holdings Ltd plunged as much as 9.2 percent to S$0.395, its lowest in nearly two months. The budget airline warned on Friday of a bleak outlook and reported a net loss of S$95.5 million ($76.25 million) for the quarter ended March, up from a loss of S$15.4 million a year ago.
Among stocks that gained, transport operator SMRT Corp Ltd rose 3.2 percent after the company said it had submitted a proposal on rail financing to the government, according to local media reports.
The proposal would allow the government to take ownership of rail assets while leasing them out to operators like SMRT. This would free operators from huge capital expenditures on asset replacement.
Both CIMB and OCBC have upgraded SMRT to "hold". (Reporting by Andrew Toh; Editing by Subhranshu Sahu)
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