Bulls And Bears

Optimism over economy lifts local market


Workers at Panasonic's refrigerator compressor factory located in Bedok. The economy was lifted in large part by the manufacturing sector, which surged 15.5 per cent year on year.
Workers at Panasonic's refrigerator compressor factory located in Bedok. The economy was lifted in large part by the manufacturing sector, which surged 15.5 per cent year on year. PHOTO: ST FILE

Investors hopeful of good earnings season after advance data shows strong Q3 growth

Local shares ended higher yesterday on optimism about the upcoming earnings season, after the stellar third-quarter gross domestic product showing last week.

The buoyant sentiment sent the Straits Times Index (STI) up 0.12 per cent or 3.95 points to 3,323.06.

The mood was buoyed by advance estimates last Friday showing that the economy expanded 4.6 per cent in the third quarter - its fastest pace in more than three years.

It was lifted in large part by the manufacturing sector, which surged 15.5 per cent year on year. The sector makes up a fifth of the economy.

"Economic conditions improved in the third quarter, and that's fuelling hopes that sectors like banking and finance, property and manufacturing are likely to outperform expectations," CMC Markets Singapore analyst Margaret Yang said.

The STI was boosted by Thai Beverage, which rose 2.1 per cent or two cents to 96 cents, and Singtel, up 0.5 per cent or two cents to $3.72.

Keppel Corp jumped 0.8 per cent or six cents to $7.13, ahead of the release of third-quarter results on Thursday.

Another positive lead from Wall Street last Friday, when the tech-heavy Nasdaq Composite finished at a record high, also helped fuel a rally in local semiconductor-related counters.

Venture Corp jumped 0.5 per cent or 10 cents to $18.49, Ellipsiz gained 0.6 per cent or 0.5 cent to 84 cents, Micro-Mechanics rose 0.6 per cent or one cent to $1.74, UMS advanced 2.5 per cent or 2.5 cents to $1.03 and Valuetronics was 2.1 per cent or two cents ahead at 96.5 cents.

AEM Holdings jumped 12.5 per cent or 32 cents to an 11-week high of $2.87 after the electronics manufacturer raised its profit guidance, citing higher sales, better margins and better operational efficiency.

Property counters continued to be boosted by the latest bout of collective sales activity.

Hongkong Land rose 1.2 per cent or nine US cents to US$7.74 and City Developments climbed 1.3 per cent or 16 cents to $12.82.

M1 closed down 0.6 per cent or one cent at $1.805 ahead of third-quarter earnings.

The telco's net profit fell 4.8 per cent year on year to $32.7 million, mainly due to higher depreciation and interest expenses.

But service revenue increased 4.9 per cent year on year to $206.7 million. This was driven by higher post-paid and fixed-services revenues, which grew 5.5 per cent and 19.9 per cent year on year respectively.

Among the most actively traded counters were Magnus Energy, which closed flat at 0.1 cent, with 83.8 million shares traded, and Accrelist, also flat, at 0.7 cent with 50.5 million shares traded.

That was the fate of two other hot shares as well: Rowsley failed to move, staying at 13.8 cents with 45.2 million shares traded, while QT Vascular was stuck at 1.1 cents on trade of 41.9 million shares.

A version of this article appeared in the print edition of The Straits Times on October 17, 2017, with the headline 'Optimism over economy lifts local market'. Print Edition | Subscribe