Singapore stocks up more than 2% on bargain hunting

Singapore stocks rallied on Monday morning (Feb 15) despite weaker than expected trade data out of China and a decline in Shanghai stock markets.
Singapore stocks rallied on Monday morning (Feb 15) despite weaker than expected trade data out of China and a decline in Shanghai stock markets. PHOTO: BLOOMBERG

SINGAPORE - Singapore stocks rallied on Monday morning (Feb 15) despite weaker than expected trade data out of China and a decline in Shanghai stock markets, which reopened today after the Lunar New Year break.

The Straits Times Index (STI) rose 2.39 per cent, or about 61 points, to 2,600.74 as of 12:10 pm, building on Friday's slight gain.

"The US ended strongly last week, that gave the markets a lift to start the morning," said CIMB Private Banking economist Song Seng Wun. "But we just had China opening, we just had a set of quite poor trading numbers. On the surface that could tamper the enthusiasm."

Data released on Monday showed that China's exports in January fell by 6.6 per cent compared with a year ago, while imports continued to fall, plunging 14.4 per cent.

Mr Song added: "For now, the STI is still up and holding steady. The question is whether the negative Chinese trade numbers will pull down sentiment."

Said Society of Remisiers Singapore president Jimmy Ho: "I think what we are seeing is range-bound play. It is unlikely we will see a major reversal because the macro picture - the oil price and China's growth - will take time to resolve."

Mr Roger Tan, chief executive of Voyage Research told The Straits Times that "there is no fundamental recovery" in Singapore stocks at this point.

"It could be due to bargain hunting, for now there is really no reason for the STI to bounce. I think the talk that oil prices could stabilise, that's just speculation in my view," Mr Tan added.

Leading the gainers this morning were Keppel Corporation, which rose 3.72 per cent; Singtel, which was up 3.63 per cent; and Nobel Group, which climbed 3.28 per cent.

Laggards included SATS, which dipped 0.78 per cent; Thai Beverage, which was down 0.74 per cent; and SIA Engineering, which fell 0.29 per cent, as at 11.01am.

The STI largely reflected region trends as Asian markets were mostly up on Monday with Tokyo stocks soaring over 5 per cent. The exception was Chinese stocks which played catch up with last week's global share fall as trading resumed after the week-long Lunar New Year holidays.

Mr Song said: "From a technical standpoint, if it (STI) holds above 2,520, that's fine. If it drops below that, we are staring at 2,400, on the upper end we are looking at 2,600 as a resistance."

Despite the gains on Monday, analysts said traders will continue to monitor developments in China, and the trading environment remains volatile.

Closer to home, the release of earnings by local banks UOB and OCBC this week "could set the tone for our market", noted Mr Song.

wongsy@sph.com.sg