Bulls And Bears

Market abuzz on talk of ECB stimulus

Europe's central bank signals possibility of further support to boost euro zone growth

Speculation of further monetary support from the European Central Bank (ECB) and a strong lead from Wall Street helped Singapore shares to end the week on a positive note.

The benchmark Straits Times Index gained 1 per cent or 30.35 points to 3,068.46. It added 1.2 per cent for the week.

Singtel led the rally, climbing 2.3 per cent or nine cents to $4.02, followed by the banking counters. DBS Group Holdings gained 1.1 per cent or 20 cents to $18, OCBC rose nearly 1 per cent or nine cents to $9.47 and United Overseas Bank put on 0.8 per cent or 17 cents to $20.40.

ECB president Mario Draghi signalled on Thursday that the central bank was prepared to undertake another large stimulus package to bolster lacklustre euro zone growth.

"It was not a wait-and-see, but it was a work-and-assess. We are ready to act if needed, we are open to a whole menu of monetary policy instruments," Dr Draghi said.

Penny plays were again hotly traded here, with Noble Group jumping 4.9 per cent or 2.5 cents to 54 cents, with 109.1 million shares changing hands. Yuuzoo leapt 4.3 per cent or 0.8 cent to 19.2 cents, with 77.1 million shares traded, while Informatics Education was flat at 5.5 cents, with 51 million shares traded.

Ezra Holdings shed 1.6 per cent or 0.2 cent to 12.7 cents, with 54.2 million shares traded, after it posted "disappointing earnings again", OCBC Investment Research analyst Low Pei Han said.

At least two analysts downgraded Sembcorp Marine to "sell" after its third-quarter after-tax operating profit was a "shocking miss". Shares of the yard group were among the leading laggards, falling 3.2 per cent or eight cents to $2.46.

"SembMarine delivered a shocking miss with a third-quarter operating profit after tax and minority interests of only $32 million due to a perfect storm of profit reversals, asset writedowns and losses from associates," RHB said.

"We are concerned by what may be a deteriorating trend in disclosure standards and transparency. What worries us most, however, is neither margins nor underperforming associates, but the company's apparent reluctance to provide clearer guidance in its announcement and in the conference call."

Another laggard, Keppel Corp, lost 0.5 per cent or four cents to $7.25 after it posted lower third- quarter earnings.

"Unsurprisingly, the offshore and marine division saw a weaker quarter, but the property segment turned in higher revenue," Ms Low said.

"This was mainly due to better performance in China and Vietnam, and partly offset by lower revenue from Singapore.

"We still see a challenging environment for the offshore segment but, as a conglomerate, the group's bottom line can still be bolstered by other businesses."

A version of this article appeared in the print edition of The Straits Times on October 24, 2015, with the headline 'Market abuzz on talk of ECB stimulus'. Print Edition | Subscribe