Singapore shares were flat at midday on Friday, with banks underperforming the broader market on concerns about low interest rates, but United Overseas Bank’s (UOBH.SI) better-than-expected results may boost sentiment later.

By the midday break, the Straits Times Index (STI) <.FTSTI> was flat, or 0.25 points higher, at 3,129.78. Total volume was 978.3 million shares.

UOB shares fell 1.4% at $18.46 on a volume of 2.6 million shares and Oversea-Chinese Banking Corp (OCBC.SI) was down 0.9% at $8.92 with 4.7 million shares changing hands.

 

DBS (DBSM.SI) retreated 0.14% at $13.92 on a volume of 6.7 million shares.

 

“The banks and property firms have been fairly flat or even slightly down. These two sectors are likely to be laggards at this point in time,” said Carmen Lee, head of OCBC Investment Research.

 

Some local traders saw the STI trading within a tight range of between 3,120 and 3,140 points after the break, but others expected UOB’s results to improve the sentiment on the banking sector.

 

“There are concerns that in such a low interest rate environment banks will not benefit much on the margins, but I don’t see any reason for people to maintain a bearish tone on banks,” said a trader.

 

“They are already lagging, so with a good result at least it will remove some worries,” he said.

 

UOB, Singapore’s third-biggest lender, said after the market closed at the break that it posted an almost 38% rise in third-quarter net profit on falling bad debt charges and higher fees, beating expectations. 

Shares of Singapore-listed palm oil firm Indofood Agri Resources (IFAR.SI) fell as much as 7.2% after it reported an 18% fall in third-quarter net profit.

 

At midday, Indofood Agri shares were down 5.3% at $2.51 on a volume of 7.8 million shares.