The New Year rally in the local market picked up pace yesterday and put the benchmark Straits Times Index within striking distance of a 12-month high.
The STI closed up for the third straight day, adding 32.83 points, or 1.12 per cent, to 2,954.14, just below the previous 12-month high of 2,960.78 recorded in April.
Hong Kong also did well, up 1.46 per cent, while Shanghai put on 0.21 per cent. Tokyo, however, dropped 0.37 per cent. The broadly positive showing partly took its cue from gains on Wall Street, where the Dow Jones Industrial Average added 0.3 per cent overnight.
While expectations of further rises are high, KGI Securities Singapore trading strategist Nicholas Teo was uncertain.
"First of all, three days do not a year make, so it's premature to say this marks a bullish year. I think what we're seeing now is a rotational catch-up of cheaper assets in Hong Kong and Singapore in relation to the (United States) bull run," he told The Straits Times.
"But these are just short-term trends. The new non-farm payroll (job numbers) coming out this Friday may cool the US market if the figures are strong, and what that means for the local market there's no way to be sure."
So far that cautious mood has not seeped into the wider sentiment, as 24 out of 30 stocks on the STI ended in the black yesterday, thanks partly to speculation around potential acquisitions.
The top gainer was Global Logistic Properties, which put on 16 cents, or 7.14 per cent, to $2.40 before its trading was halted in the afternoon amid news that it is inviting buyout bids. United Engineers, which is outside the benchmark, also surged on news that an acquisition may be near. Its shares rose nine cents, or 3.5 per cent, to $2.66 before a trading halt. Both companies said there is no assurance of a definite transaction.
Telcos Singtel and StarHub were both up. Singtel added five cents, or 1.36 per cent, to $3.72, and StarHub closed up seven cents, or 2.5 per cent, to $2.87. Telco stocks are noted for their healthy dividend yield, and the duo will be popular choices for bullish investors, especially after some year-end sell-off.
Other dividend plays also performed well. Ascendas Real Estate Investment Trust went up two cents, or 0.87 per cent, to $2.33. CapitaLand Commercial Trust added half a cent, or 0.33 per cent, to $1.51.
Only six STI stocks dropped yesterday, with Golden Agri-Resources losing the most, down half a cent, or 1.18 per cent, to 42 cents on 15.2 million traded shares.
Several non-benchmark stocks in the oil and gas sector were hotly traded. Mermaid Maritime rose 1.4 cents, or 8.14 per cent, to 18.6 cents on 44.9 million traded shares, while Ezra Holdings closed up 0.1 cent, or 1.96 per cent, to 5.2 cents on 68.5 million traded shares. The crude oil benchmark Brent futures remained above US$56 per barrel yesterday.