BullsAndBears

A big fillip from Wall Street and Europe

Recovery in oil prices also boosts energy stocks; Vietnam foray gives a lift to Jumbo

Singapore stocks rallied yesterday after Wall Street and European markets kicked off the year with solid gains from upbeat manufacturing data.

The positive news sent the Straits Times Index up 0.77 per cent or 22.34 points to 2,921.31, buoyed by Genting Singapore, Sembcorp Industries, Singapore Press Holdings, Golden Agri-Resources and bank stocks.

The trigger for Wall Street came from news that US factory activity accelerated to a two-year high last month while construction spending in November was at levels not seen for almost 11 years.

Euro zone manufacturing activity last month grew at the fastest pace in more than five years.

Genting gained 4 per cent or 3.5 cents to 91 cents and Sembcorp Industries rose 2.4 per cent or seven cents to $2.93. SPH gained 1.4 per cent or five cents to $3.58.

Golden Agri notched up 1.2 per cent or 0.5 cent to 42.5 cents.

The banks were on the up and up as well, with OCBC climbing 1.3 per cent or 12 cents to $9.10 and UOB adding 1 per cent or 21 cents to $20.62. DBS gained 1.2 per cent or 20 cents to $17.52.

RHB, which maintained a buy call on DBS, said the bank remained its top pick among its peers because there is more upside to come. Even though the bank has chalked up a 14.3 per cent gain since the US presidential election on Nov 8, "the positives from expected higher Singapore interest rates have not been fully priced in", the broker said.

"We expect Sibor to increase more sharply going forward. DBS' earnings would rise the most from every basis point rise in the Singapore Interbank Offered Rate."

Energy plays rebounded on a recovery in oil prices fuelled by hopes that US inventories are falling and signs that producers are willing to adhere to agreed production cuts that came into effect this week.

The most actively traded included Noble Group, Charisma Energy and Ezra Holdings, which erased earlier losses after the rebound in oil prices. Noble gained 1.1 per cent or 0.2 cent to 17.8 cents, with 153.6 million shares changing hands.

Charisma jumped 14.3 per cent or 0.1 cent to 0.8 cent with 58.7 million shares traded. Ezra advanced 2 per cent or 0.1 cent to 5.1 cents on trade of 39.3 million shares.

Other hotly traded oil and gas plays included Ezion Holdings, up 1.3 per cent or 0.5 cent to 39.5 cents with 20.1 million stares changing hands, and Mermaid Maritime, which jumped 8.9 per cent or 1.4 cents to 17.2 cents, with 23.9 million shares traded.

Jumbo Group gained 3.9 per cent or 2.5 cents to 67 cents, on news that it is expanding to Vietnam.

The first Jumbo Seafood restaurant there is expected to open in Ho Chi Minh City in the middle of the year. There are also plans to roll out two other outlets, in Ho Chi Minh City and Danang, over the next two years.

A version of this article appeared in the print edition of The Straits Times on January 05, 2017, with the headline 'A big fillip from Wall Street and Europe'. Print Edition | Subscribe