Bulls And Bears

Singapore shares clock further gains

Stocks boosted by rally in regional emerging markets as US$ drops to lowest in five weeks

Local equities continued to push higher yesterday, lifted by a rally in regional emerging markets as the United States dollar dropped to its lowest in nearly five weeks.

This came as the Federal Reserve raised interest rates as expected, while maintaining that it would stick to two more rate hikes for the rest of the year - a more conservative stance than markets had been anticipating.

The benchmark Straits Times Index (STI) put on 5.86 points or 0.19 per cent to 3,169.38 - marking a gain of 36.03 points or 1.15 per cent for the week.

Data that showed the Republic's non-oil domestic exports grew for the fourth straight month in February helped boost sentiment as well.

Hong Kong edged up 0.09 per cent, Jakarta advanced 0.4 per cent and Seoul rose 0.67 per cent.

But Tokyo eased 0.35 per cent while Shanghai sank 0.96 per cent, after China's central bank raised short-term interest rates in line with the US rate decision.

"A less hawkish monetary policy in the US is more likely to push assets outside the US into higher-risk, higher-return markets," Mr James Woods, an investment analyst at Rivkin Securities, told Bloomberg.

"A weaker dollar is supportive of those emerging markets generally. I'm not sure whether it's going to be long-lived though. People are going to get back to focusing on the next Fed hike and also Trump's policies, which would be dollar-supportive."


ST GRAPHICS

Wall Street dipped 0.07 per cent overnight, erasing earlier gains as traders moved in to lock in profits.

The STI's solid showing yesterday was due in part to the three local banks, led by United Overseas Bank, which grew 0.8 per cent or 17 cents to $21.95.

OCBC Bank added 0.3 per cent or three cents to $9.66 while DBS Group Holdings put on 0.1 per cent or two cents to $19.14.

The telcos also fared well, with Singtel rising 1 per cent or four cents to $3.99, while StarHub added 2.1 per cent or six cents to $2.87.

M1 surged 7.9 per cent or 16 cents to $2.19 before calling for a trading halt amid market rumours of its potential sale.

An OCBC Investment Research report maintained a "neutral" rating on the local mobile sector, noting that competition is set to intensify as incumbents will likely take action to gain market share before TPG Telecom launches its services, likely next year. It downgraded M1 from "hold" to "sell", maintained a "sell" call on StarHub, and kept a "buy" on Singtel with a fair value of $4.25.

Elsewhere, Sincap Group requested for a trading halt on its shares before markets opened. The stock last traded at one cent on Thursday.

Commodity trader Noble Group remained the most heavily traded counter, shedding 5.2 per cent or 1.1 cents to 19.9 cents on 115.7 million shares traded.

Turnover across the bourse came up to 1.67 billion shares worth $1.87 billion.

A version of this article appeared in the print edition of The Straits Times on March 18, 2017, with the headline 'Singapore shares clock further gains'. Print Edition | Subscribe