Bulls And Bears

Markets pause ahead of Yellen's speech

STI inches up in lacklustre trading, Asian bourses end mixed amid strong US data

Singapore shares recouped some recent losses yesterday but trading was still slow as investors waited for further clarity on the outlook for the United States economy.

The latest clue is in US home sale figures, due out yesterday evening after the market closed.

"Given the recent strong housing starts and jobs reports, the housing market's momentum is picking up with support from new jobs created and low mortgage rates," CMC Markets analyst Margaret Yang said.

With positive signs piling up, Federal Reserve chair Janet Yellen could be emboldened to push for a rate hike by the end of this year. She is expected to give another closely watched speech at around 11pm on Friday, Singapore time.

Sentiment on Wall Street was somewhat downbeat amid the wait, with the Dow Jones Industrial Average paring 0.12 per cent on Monday.

Shanghai rose 0.16 per cent but Hong Kong ended flat. Tokyo lost 0.61 per cent as the Japanese yen gained yesterday.

Against the choppy backdrop, Singapore's benchmark Straits Times Index gained 9.24 points or 0.33 per cent to 2,850.43 points. But a lacklustre turnover of $653.8 million across the whole market reflected the cautious mood.

On the STI, 17 of its 30 component stocks rose, with Hutchison Port Holdings Trust the top gainer, closing one US cent or 2.3 per cent higher at 44.5 US cents on 10 million shares traded. Golden Agri-Resources was among the more active counters, rising half a cent or 1.37 per cent to 37 cents on 18.45 million traded shares.

Ascendas Real Estate Investment Trust (Reit) put on three cents or 1.24 per cent to $2.45, while CapitaLand Mall Trust added two cents or 0.93 per cent to $2.16.

OCBC remains positive on Singapore Reits, analyst Andy Wong said in a note yesterday. Of the 23 S-Reits under OCBC's research coverage, only two reported results short of expectations.

"Notwithstanding the macroeconomic uncertainties and supply pressures within the sector, we believe the Fed July meeting minutes support our theory that there will be a structural shift towards a prolonged period of accommodative interest rates," he said, naming Ascendas Reit, Frasers Centrepoint Trust and Keppel DC Reit as his top picks.

Among the 10 STI laggards, Genting Singapore slid the most, by one cent or 1.32 per cent to 75 cents. Thai Beverage dropped for a second straight session, off one cent or 0.98 per cent to $1.01.

Sembcorp Marine fell half a cent or 0.38 per cent to $1.325. Keppel Corp added one cent or 0.19 per cent to $5.38. Outside the STI, Ezra slipped 0.1 cent or 2.33 per cent to 4.2 cents, while Ezion shed half a cent or 1.92 per cent to 25.5 cents.

On the oil and gas front, investors barely had time to cheer over the recent oil price rally before the price fell again. Brent crude futures went below US$49 a barrel yesterday.

A version of this article appeared in the print edition of The Straits Times on August 24, 2016, with the headline 'Markets pause ahead of Yellen's speech '. Print Edition | Subscribe