Asian stocks follow oil price route to end higher, STI closes 14 points up

Display of the Straits Times Index (STI) on a ticker board in SGX Centre after the market closed on Aug 21, 2015.
Display of the Straits Times Index (STI) on a ticker board in SGX Centre after the market closed on Aug 21, 2015.PHOTO: ST FILE

SINGAPORE - Singapore shares closed higher in line with the rest of Asia on higher oil prices and ahead of the release of United States jobs report, which could offer clues on the pace of interest-rate hikes.

The Straits Times Index closed up 0.51 per cent or 14.14 points to 2,809.23, led by OCBC, which rose 0.8 per cent or seven cents to S$8.67; CapitaLand, which gained 1.7 per cent or five cents to S$3.02. Keppel Corp climbed 1.5 per cent or eight cents to S$5.38.

The market also got a boost from news that City Developments (CDL) will be re-included to the FTSE EPRA/NAREIT Global developed index on June 20. The stock jumped 4.3 per cent or 36 cents to S$8.81. The index tracks the performance of listed real estate companies and Reits worldwide.

RHB Securities, which has a "conviction buy" call on the property developer Friday, said the news is positive for CDL as the index is widely used as a benchmark by Exchange Traded Funds worldwide. Credit Suisse expects CDL's stock to be driven by "further asset divestments to unlock portfolio value."

Meanwhile, FTSE Russell on Thursday said that there will be no changes to the STI constituents, following a June quarterly review.

The STI reserve list, comprising the five highest ranking non-constituents by market capitalisation, are Suntec REIT, Singapore Post, Neptune Orient Lines, Keppel REIT and Mapeltree Commercial Trust. Companies on the reserve list can replace any constituents that become ineligible as a result of corporate actions, before the next review on Sep 1.

Noble Group was the most actively traded stock, closing down 13.3 per cent or four cents to 26 cents, with 225.2 million shares traded.

The commodity trader, which had asked for a brief trading halt yesterday morning as it announced a US$500 million (S$687 million) rights issue and changes to its board of directors, slumped after it resumed trading.

"The rights have been priced at a 63 per cent discount ... underscoring the financial difficulties Noble is in. The company is hard at work bolstering its balance sheet," IG market strategist Bernard Aw said.

Meanwhile, oil-related plays got a boost from oil prices testing above US$50 a barrel again, as a drop in US inventory offset the absence of an Organization of the Petroleum Exporting Countries (OPEC) agreement to cap crude output.

Sembcorp Marine gained nearly 1 per cent or 1.5 cents to S$1.57; while Charisma Energy soared 9.1 per cent or 0.1 cents to 1.2 cents.

Cityneon Holdings jumped 5.6 per cent or 4.5 cents to 85 cents after announcing it has signed a term sheet to operate the Marvel's Avengers Station touring exhibitions in Australia.

gleong@sph.com.sg