Bulls And Bears

Higher oil prices help drive up S'pore shares

Market also cheers re-inclusion of City Developments in global property stock index

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

The Straits Times Index added 0.51 per cent or 14.14 points to close at 2,809.23 points. For the week, the STI eked out a 0.2 per cent gain.

Yesterday's gains were led by OCBC, which rose 0.8 per cent or seven cents to $8.67, and CapitaLand, which gained 1.7 per cent or five cents to $3.02. Keppel Corp rose 1.5 per cent or eight cents to $5.38.

The market was also boosted by news that City Developments (CDL) will be re-included in the FTSE Epra/Nareit Global Developed Index on June 20. The stock jumped 4.3 per cent or 36 cents to $8.81. The index tracks listed real estate stocks and Reits worldwide.

RHB Securities, which has a "conviction buy" on the property developer yesterday, 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 there will be no change to the STI constituents following a June quarterly review.

On the STI reserve list, comprising the five highest-ranking non-constituents by market value, are Suntec Reit, Singapore Post, Neptune Orient Lines, Keppel Reit and Mapeltree Commercial Trust. These companies can replace constituents that become ineligible before the next review on Sept 1.

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

The commodity trader, which briefly halted trading yesterday morning as it announced a US$500 million (S$688 million) rights issue and changes to its board of directors, slumped after it resumed trading.

Just days after the resignation of chief executive Yusuf Alireza, Noble said founder and group chairman Richard Elman will be stepping down. It also announced a one-rights-for- one-share fully underwritten renounceable rights issue.

"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 levels above US$50 a barrel again as a drop in US inventory offset the absence of an Organisation of Petroleum Exporting Countries agreement to cap crude output.

Sembcorp Marine gained nearly 1 per cent or 1.5 cents to $1.57, while Charisma Energy soared 9.1 per cent or 0.1 cent 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 Marvel's Avengers Station touring exhibitions in Australia.

A version of this article appeared in the print edition of The Straits Times on June 04, 2016, with the headline 'Higher oil prices help drive up S'pore shares'. Print Edition | Subscribe