Bulls And Bears

Banks lead rebound in S'pore bourse

Good time to pick up shares as local market valuation is among lowest in Asia: Analyst

Local shares rebounded yesterday in line with most markets in the region.

The benchmark Straits Times Index (STI) climbed 19.49 points, or 0.7 per cent, to $2,813.48 on a turnover of 1.42 billion shares worth $1.22 billion.

Trading on the STI has been range-bound since United States President-elect Donald Trump's unexpected victory last week, noted CMC Markets Singapore market analyst Margaret Yang.

"There's been a slight pick-up in volumes since last week but they are still quite low," she said. "I would say there is more certainty in the markets now, with the US election over and traders looking forward to a very likely December rate hike - but that still hasn't been enough to move local stocks in a significant way. Investors here seem to be looking overseas instead."

That said, Ms Yang added that the valuation of the local market is now among the lowest in Asia, which makes it attractive to value investors as well as overseas buyers.

Much of the STI's rise yesterday was thanks to the three local banks, helped by higher interest rates.

DBS Group Holdings led the pack with a 23-cent or 1.4 per cent gain to $16.43. United Overseas Bank added 27 cents or 1.4 per cent to $19.43 and OCBC Bank put on six cents or 0.7 per cent to $8.83.

A number of Reits (real estate investment trusts) bounced back after being pummelled in recent sessions as traders swooped in for bargains. Ascendas Reit rose six cents or 2.7 per cent to $2.31, while CapitaLand Commercial Trust was up three cents or 2 per cent at $1.51.

Property giant CapitaLand rose one cent or 0.3 per cent to $3 after announcing it will open eight malls in Asia next year with almost one million sq m of gross floor area.

Outside of the STI, BreadTalk Group eased half a cent or 0.5 per cent to $1.085. The group said yesterday that it will take its Din Tai Fung brand of restaurants to Britain as part of a joint venture. The first outlet is expected to open in London next year. RHB Research Institute noted that the move into a new market would be favourable for the group, since the domestic market is relatively mature. It maintained its "buy" call on the stock with a target price of $1.45.

Best World International requested a trading halt in the afternoon, pending an announcement.

Commodity trader Noble Group was the day's most heavily traded counter, inching up 0.1 cent to 18.1 cents on 168.9 million shares done.

Elsewhere in Asia, Tokyo rose 0.4 per cent, Shanghai added 0.11 per cent and Hong Kong dipped 0.08 per cent.

Wall Street pared 0.29 per cent overnight as the post-Trump rally began to falter. All eyes will be on Federal Reserve chair Janet Yellen's congressional testimony, due to be delivered late last night, for clues to the next rate hike and possible implications of Mr Trump's fiscal policies.

A version of this article appeared in the print edition of The Straits Times on November 18, 2016, with the headline 'Banks lead rebound in S'pore bourse'. Print Edition | Subscribe