Local markets rally ahead of Greek vote, STI ends week 0.65 per cent higher

Pedestrians exit an escalator at the Singapore Exchange Ltd. (SGX) headquarters in Singapore.
Pedestrians exit an escalator at the Singapore Exchange Ltd. (SGX) headquarters in Singapore.PHOTO: BLOOMBERG

SINGAPORE - Local stocks held firm on Friday, closing the week on a high note as investors took up position ahead of a potentially market shattering event in Greece's referendum on Sunday.

The benchmark Straits Times Index closed 14.89 points or 0.45 per cent up at 3,342.73, while overall trading volume was up from Thursday to 1.26 billion shares. For the week, the index was up 0.65 per cent, wiping the big loss on Monday to stay above 3,320.

This stood in contrast against Wall Street, where anxiety over Greece gripped sentiments and sent Dow Jones Industrial Average down 0.16 per cent overnight, despite another month of solid job growth in the United States according to the official data for June.

IG market analyst Bernard Aw was, however, not convinced that the local market is in a sustained rally, expecting more volatility next week.

"While we now have two consecutive weekly gains, they came after two months of extended drop. I still see this as a technical rebound, and (yesterday) was nothing spectacular as the index largely stayed within the 3,330-3,340 range."

If the referendum outcome is unfavourable, next Monday could be very volatile, he warned, adding: "Watch the 3,300 support level. If STI breaks below that, there may be further downside through the week."

Friday's top performing blue chip was CapitaLand Mall Trust, which rose five cents or 2.36 per cent to S$2.17. The gain came after the Monetary Authority of Singapore unveiled on Thursday a series of proposed measures that will ensure better protection and accountability for investors of real estate investment trusts (REITs).

Other Reits were similarly lifted, with Ascendas Reit up one cent or 0.41 per cent to close at S$2.42, while Ascott Residence Trust - which announced this week an acquisition of a hotel in New York - closed 0.5 cent or 0.38 per cent up at S$1.305.

Banking plays also ended higher yesterday. DBS closed 41 cents or 2 per cent up at S$20.91, OCBC gained eight cents or 0.79 per cent to S$10.23, while United Overseas Bank rose 10 cents or 0.43 per cent to S$23.40.

whwong@sph.com.sg