Bulls And Bears

S'pore shares lifted by stellar showing in US

STI snaps two-day losing streak; focus turns to latest Fed meeting for interest rate hints

Singapore equities moved back into positive territory yesterday, as investors were cheered by stellar gains in the United States.

The Straits Times Index (STI) added 28.01 points or 0.91 per cent to 3,122.2, snapping a two-day losing streak. Turnover was 2.59 billion shares worth $1.47 billion.

The strong showing came as Wall Street resumed trading on Tuesday after a holiday, with the Dow Jones Industrial Index rising 0.58 per cent to a new record high, thanks to a set of encouraging earnings from blue chip stocks.

Other markets in Asia also rose. Hong Kong advanced 0.99 per cent, Shanghai, 0.24 per cent, and Jakarta, 0.33 per cent. Tokyo was flat, edging down 0.01 per cent.

All eyes are on the US Federal Reserve's latest meeting minutes today for fresh insights into the Fed's take on interest rates, economic performance as well as President Donald Trump's policies.

Recent comments from Fed members have raised the likelihood of a March rate hike, analysts say.

At home, all three local banks played a major role in pushing the STI higher, with United Overseas Bank jumping 45 cents or 2.1 per cent to $21.77.

OCBC Bank rose 18 cents or 1.9 per cent to $9.66 and DBS Group Holdings advanced 29 cents or 1.6 per cent to $18.75.

Moody's Investors Service noted in an earlier report that the three lenders' latest financial results point to a further decline in profitability and mixed asset quality performance, "but pressure on credit costs and net interest margins should subside in 2017, providing support to profitability".

Commodity trader Noble Group was the most traded counter, soaring 2.5 cents or 10.9 per cent to 25.5 cents on 260.8 million shares done.

Other active stocks included Thai Beverage, up half a cent or 0.5 per cent to 96.5 cents.

Within the troubled offshore marine space, Ezra Holdings slumped 0.1 cent or 4.8 per cent to two cents.

Pacc Offshore Services Holdings sank one cent or 2.7 per cent to 35.5 cents, after reporting on Tuesday a fourth-quarter net loss of US$345.44 million (S$490 million), on the back of charges for impairments of fixed assets and goodwill.

An OCBC Investment Research report downgraded the stock to "sell", saying: "Looking ahead, we would monitor if the group is able to secure work for Posh Xanadu, whose contract is expected to end next month."

Vallianz Holdings, which sought a trading halt on Tuesday, yesterday announced it has entered into letters of agreement with certain trade creditors to settle $7.6 million of trade payables via the issue of new ordinary shares in Vallianz.

The trade creditors will subscribe to 380.6 million new ordinary shares in Vallianz at two cents per share, it said. The stock last traded at two cents, 0.1 cent or 4.8 per cent lower than its previous close.

A version of this article appeared in the print edition of The Straits Times on February 23, 2017, with the headline 'S'pore shares lifted by stellar showing in US'. Print Edition | Subscribe