BullsAndBears

S'pore shares ride on global rally to rebound

Investors bet on US president-elect's plans for more fiscal spending, his conciliatory tone

Singapore equities bounced back yesterday as traders digested news of Mr Donald Trump's election as the next US president.

The Straits Times Index (STI) - buoyed by a strong rebound across global markets - jumped 44.21 points or 1.58 per cent to 2,834.09. Total turnover was a robust 1.96 billion shares worth $1.56 billion.

Investors placed their bets on Mr Trump's plans for more fiscal spending and business-friendly policies, likely helped by a conciliatory tone in his victory speech - all of which were reflected in Wall Street's surprise 1.4 per cent gain overnight.

"(On Wednesday), Trump spoke about re-uniting the country, rebuilding the inner cities, looking for common ground and building on foreign partnerships and relationships," said OCBC Investment Research in a note. "The overhang has been cleared, but we believe that risk aversion is likely to remain."

Singapore Exchange (SGX) was among the gainers, rising 12 cents or 1.7 per cent to $7.16.

CIMB analyst Lim Siew Khee cited SGX as an immediate winner of the US election results in a report, as "heightened market volatility could lead to higher market volumes in the short term". But the key question remains whether these gains are sustainable, she added.

All three local lenders put up a strong showing, notably DBS Group Holdings, up 57 cents or 3.8 per cent to $15.69 in heavy trade.

But Ms Lim believes there could be "murkier quarters ahead" for the banks, along with capital goods firms. "Post-Trump's victory, all eyes are on the possibility of Fed rate hikes in December, which could have an implication on banks' earnings in the 2017 fiscal year. Until then, the short-term US dollar weakness with a Trump victory could have a negative impact on Sibor/Sor (Singapore Interbank Offered Rate/Swap Offer Rate)."

Property giant CapitaLand rose five cents or 1.7 per cent to $3.08. A DBS Group Research report noted the group is seeing "improving earnings quality", and that its strategy to focus on growing its commercial portfolio is bearing fruit, offering better earnings visibility. It maintained a "buy" call on the stock, with a target price of $3.60.

Ascendas Reit was one of the few blue chips that fell, losing four cents or 1.7 per cent to $2.30, along with Singtel, down two cents or 0.5 per cent to $3.84.

Outside of the STI, oil and gas-related counters were in active play, including shipbuilder Vard Holdings, which shot up four cents or 16.7 per cent to 28 cents.

Ezra Holdings climbed 0.1 or 2.3 per cent to 4.4 cents. The offshore services firm said its proposals to waive various financial covenants on $150 million bonds maturing in 2018 were approved by noteholders at a meeting on Wednesday.

Commodity trader Noble Group was the most heavily traded, surging 2.3 cents or 12.6 per cent to 20.5 cents on 454.3 million shares done.

A version of this article appeared in the print edition of The Straits Times on November 11, 2016, with the headline 'S'pore shares ride on global rally to rebound'. Print Edition | Subscribe