Bulls And Bears

S'pore shares buoyed by Wall Street highs

Focus on oil and gas plays following JTC's rental rebate for offshore and marine tenants

Singapore equities were off to a steady start to the week, thanks to yet another record finish on Wall Street last week.

The benchmark Straits Times Index (STI) rose 18.91 points or 0.64 per cent to 2,981.54 yesterday - its highest since November 2015.

Key indices in the US climbed to all-time highs last Friday, with the Dow Jones Industrial Average up 0.32 per cent to close in on the 20,000 milestone mark for the first time. This came as a set of healthy December job data fuelled the greenback, along with expectations that the Federal Reserve will proceed with raising interest rates.

Across Asia, Shanghai rose 0.54 per cent, Hong Kong added 0.25 per cent and Sydney gained 0.9 per cent. Tokyo was closed.

CMC Markets Singapore analyst Margaret Yang noted the STI has rallied by nearly 3 per cent in its first week of trading this year, lifted by strong fourth-quarter GDP data and a rebound in oil prices. "The sustainability of this rally will depend on the upcoming corporate earnings reports. If earnings are good, we will probably see the STI challenge 3,000 points soon."

Earnings season starts on Friday, with Singapore Press Holdings announcing its first-quarter results.

Much of yesterday's activity focused on oil and gas plays, following news that JTC has given rental rebates of 3-10 per cent to its offshore and marine tenants and lessees for 2017 - the first such for Singapore industrial properties since the global financial crisis in 2008.

Keppel Corp rose seven cents or 1.2 per cent to $6.06. Rig-builder Sembcorp Marine added three cents or 2 per cent to $1.52 and Sembcorp Industries gained seven cents or 2.3 per cent to $3.07.

DBS retail market strategist Yeo Kee Yan said the oil and gas sector started this year on a positive note amid optimism the supply glut will abate. "Our pick among the yards is Sembcorp Industries, Ezion among the offshore support vessel (firms), and Posh (Pacc Offshore Services Holdings) as a potential privatisation candidate," he said, adding that DBS has upgraded Mermaid Maritime to "buy" as "risks dissipate and the company looks set to escape the downturn relatively unscathed".

Ezion Holdings shot up 3.5 cents or 8.8 per cent to 43.5 cents, Posh gained one cent or 3 per cent to 34 cents and Mermaid jumped 0.7 cent or 3.8 per cent to 19.3 cents.

Logistics company Cogent Holdings was queried by the Singapore Exchange after surging nearly 10 per cent to 70 cents at noon, before closing at 69 cents, 5.5 cents or 8.7 per cent higher than Friday's close. The firm later said it was not aware of any possible explanation behind the share price movement.

The day's top active was Equation Summit, which put on 0.1 cent or 5.9 per cent to 1.8 cents on 112.9 million shares done.

A total of 2.14 billion shares worth $881.2 million were traded across the bourse.

A version of this article appeared in the print edition of The Straits Times on January 10, 2017, with the headline 'S'pore shares buoyed by Wall Street highs'. Print Edition | Subscribe