Bulls And Bears

Local market shrugs off Fed rate delay

STI closes flat as profit-taking wipes out morning gains by end of trading day

A decision by the United States Federal Reserve not to raise interest rates lifted Asian markets yesterday, but traders in Singapore were not too impressed.

Bucking the regional trend, the local benchmark Straits Times Index closed practically unchanged, slipping just 4.68 points or 0.16 per cent to end at 2,846.06.

NetResearch Asia said after the market closed that although the Singapore bourse opened strongly in the morning, the gains were all wiped out by profit-taking by the end of the trading session.

After all, it noted, the move by the Fed to keep rates unchanged was a widely expected one. Furthermore, the Fed also indicated that it could still tighten monetary policy by the end of the year as the US labour market improves.

Hong Kong rose 0.38 per cent, Shanghai added 0.54 per cent and Sydney and Seoul gained 0.67 per cent.

Tokyo was closed for a holiday.

At home, Asiamedic shares was among the most active, rising 0.4 cent by the end of the day to 9.5 cents.

Earlier in the session, the stock had climbed as high as 10.6 cents - a level it had also hit on Wednesday, prompting a query by the Exchange.

The company had said on Wednesday it was pursuing potential opportunities for expansion and continues to "engage in discussions on prospective business opportunities, including mergers and acquisitions".

SMRT fell half a cent to $1.65. It had announced on Wednesday that its unit, SMRT Services, had entered a joint venture shareholders' agreement with Cyclect Electrical Engineering.

The joint venture will focus on providing electrical systems for land transport, including those for rail systems, or infrastructure for electric power systems or networks for electric cars and buses.

OUE Hospitality Trust gained a cent to 67 cents, after CIMB Research issued an "add" call on the trust yesterday.

"As we believe OUEHT is poised to post the strongest distribution per unit growth, it is our preferred pick in the hospitality sub-sector," analysts Yeo Zhi Bin and Lock Mun Yee wrote.

They said the company's retail revenues will likely grow in this half of the year, thanks to the opening of Michael Kors (MK) and Victoria's Secret (VS) flagship stores in Mandarin Gallery in Orchard Road. "Additionally, MK and VS have signed long lease periods of seven and 10 years, respectively; this would enhance OUEHT's income stability."

Delfi was flat at $2.15. OCBC Investment Research yesterday upgraded its call on the stock from "sell" to "hold", citing the company's improved financial performance and the recent slide in its share price, which has made it more attractive.

A version of this article appeared in the print edition of The Straits Times on September 23, 2016, with the headline 'Local market shrugs off Fed rate delay'. Print Edition | Subscribe