Yangzijiang makes waves on trading debut

THERE were a few compelling tales surging through the market yesterday but the Straits Times Index (STI) only managed to tell one of them.

While the index rose and fell in its familiar manner before closing 14.91 points down at 3,400.41, a more dramatic narrative of a new listing which made waves was occurring on the sidelines.

Chinese shipbuilder Yangzijiang Shipbuilding, the largest China flotation in Singapore so far, debuted with a bang.

An astonishing 462.1 million shares changed hands with the price ending 39 cents above the 95 cent issue price at $1.34, although at one point it was 44 cents to the good. Lucky subscribers reaped a hefty 41 per cent gain.

Also, five covered warrants issued by foreign banks on the stock rose on its coat-tails.

An impressive 86.92 million contracts, in total, changed hands as traders switched between the mother share and the covered warrants throughout the session.

'Dealers thought the high turnover of Yangzijiang could also be linked to the simultaneous trading of the covered warrants on the counter,' said NetResearch.

One trader said the intense interest could also be due to anticipation that the shipbuilder may soon announce lucrative contracts.

Its sterling debut also spurred buying interest in other shipyard shares.

Keppel Corp rose 30 cents to a record $21 with 1.62 million shares traded, while Labroy Marine was up five cents at $2.40 on a volume of 2.42 million shares.

For the rest of the market, it was another good day for penny construction stocks with traders anticipating contracts to be handed out by Genting International to build the Sentosa casino resort.

'Singapore is attracting tonnes of foreign money and this is finding its way into the stock market as interbank rates drop,' said a dealer.

Singapore's benchmark three-month inter- bank interest rate has fallen by almost 1 percentage point to 2.56 per cent in the past six weeks.

And besides blue chips, investors are looking closely at penny stocks that may benefit from the building boom.

Yongnam Holdings - a fabricator of steel structures - gained 1.5 cents to 33 cents on a hefty volume of 82.3 million shares, while engineering contractor CSC Holdings rose 0.5 cent to 32 cents, on 61.5 million trades.

But Genting fell four cents to $1.01, with 78.8 million shares traded, as the exuberance accompanying the 'all clear' to start its Sentosa project wore out.

It all looked as if the blistering sideline action would also lift the STI initially.

For the second straight day, the STI opened above last Tuesday's record 3,422.62 and went on to hit 3,438.71.

But the recent run-up in property stocks petered out and they eventually dragged the index down to its 3,400.41 close.

CapitaLand slipped 20 cents to $8.35 on a volume of 6.55 million shares, while beverage and property giant Fraser & Neave lost 20 cents to $5.30, with 2.24 million shares traded.

Hotel Properties, another hot favourite in recent weeks, declined 20 cents to $6.15 with 2.25 million shares traded.

But GuocoLand hit a record high of $5.10 on a volume of 4.3 million shares, buoyed by the company's property exposure in China.

GOH ENG YEOW

---

STRONG START

An astonishing 462.1 million Yangzijiang shares changed hands with the price ending 39 cents above the 95 cent issue price at $1.34. Lucky subscribers reaped a hefty 41 per cent gain.