TAKING STOCK

BETWEEN rising Chinese interest rates and the lure of a profit after last week's three-day winning streak, there was only one way the Singapore market was going yesterday.

Singapore's Straits Times Index took a 16.23-point drop, but other markets went down the same route and there was a slide across the region, including Japan and Tokyo, with fingers pointing in all directions.

One dealer said: "Yesterday's market was driven by profit-taking with the interest rate increase more of an excuse to sell."

Last Friday, the People's Bank of China raised one-year lending and deposit interest rates by 0.27 percentage point.

Morgan Stanley issued a research note, which said that the Chinese central bank's raising of interest rates will "affect the export performance of China's major trading partners".

If the rise does curb capital investment, Morgan Stanley said suppliers of raw materials in China and regionally in Hong Kong, Taiwan and South Korea could be affected.

Companies in sectors such as steel, cement, metals and chemicals could also be hit as will be equipment suppliers, energy and oil players.

The uncertainty hit China stocks, which generally had a weak day, with losers outweighing gainers.

Some of the active China movers were Cosco Corp, which lost six cents to close at $1.54, while China Sun Bio-Chem shed 1.5 cents to end at 82 cents.

Even DBS Group Holdings, with exposure to Hong Kong and China via Dao Heng Bank, slipped 30 cents to $18 on 2.6 million shares.

There was one stand-out exception - Friday's hot market debutant Synear, which makes frozen dumplings. It continued its rise to 91 cents, up five cents on a volume of 77.2 million shares, the day's most active counter by far.

It may have added some shine to the benchmark STI, which slipped 0.65 per cent to 2,467.3 on a mediocre trading volume of 971.4 million shares worth $923.5 million. Losers outnumbered gainers by 351 to 196 and 707 counters unchanged. If dumplings were traders' first choice, beer was second with Thai Beverage, the maker of Chang Beer, the next most actively traded. It saw 30.5 million shares traded, but its price ended unchanged at 28.5 cents.

The spur was probably two "buy" upgrades, from DBS Vickers Securities and Deutsche Bank Securities.

Gallant Venture, the largest owner and operator of industrial parks in Batam and Bintan, jumped 5.1 per cent or 3.5 cents to 72 cents. Volume was an active 27.7 million shares. Market speculation is that the firm may build a casino in Bintan.