BullsAndBears

S'pore shares start new year on positive note

Trading was thin, but ST Index up 0.63%, giving investors hope of a good 2017 ahead

Singapore shares kicked off 2017 with a spring in their step yesterday, giving investors some hope that there will be a good year ahead.

The benchmark Straits Times Index (STI) closed up 18.21 points, or 0.63 per cent, at 2,898.97, although trading was thin across the whole market, with only 884.1 million shares worth $713.1 million changing hands.

CMC Markets analyst Margaret Yang was among the hopeful ones after the positive first day, saying: "It's a common industry belief that the first three trading days are an important indicator of how the rest of the year will unfold, so it was quite encouraging to see the market go up."

News that Singapore's economy grew a surprisingly robust 1.8 per cent year on year for the fourth quarter of last year offered another reason to cheer.

"Resilience in the economy, crude oil prices holding steady - this year looks to be more promising than last year. Judging from the current volumes, we're still not likely to see huge rallies, but it'll be great if the STI can hit 3,000 in the first quarter," said Ms Yang.

China's markets also did well, with Hong Kong up 0.68 per cent and Shanghai rising 1.04 per cent. Tokyo remained closed for the New Year holiday.

The offshore and marine plays had a good showing yesterday. Keppel Corporation - one of the 20 STI gainers - added one cent to $5.80.

Outside the benchmark, Sembcorp Marine was up 2.5 cents to $1.405. Ezra Holdings gained 0.1 cent to five cents, with 24.2 million shares traded, and Ezion Holdings put on half a cent to 39 cents, with 18.8 million shares traded. Jardine Matheson Holdings was the biggest STI gainer, up US$1.87 (S$2.70) to US$57.12. Hongkong Land Holdings closed up 18 US cents to US$6.51.

Among banks, OCBC Bank added six cents to $8.98, and United Overseas Bank rose one cent to $20.41. But DBS Group Holdings was among seven STI stocks that ended in the red, easing two cents to $17.32.

While expectations are rife that the local banks may see better margins this year due to rising interest rates, other structural issues such as credit quality and uneven economic growth have not gone away.

OCBC Investment Research head Carmen Lee downgraded DBS' rating to "hold" yesterday with a fair value estimate of $17.83. "While the global outlook is showing some signs of improvement, the underlying softness for the Singapore economy and selected sectors, including oil and gas and property, remain," she said, advising investors to consider buying DBS shares at $16.80 or lower.

Other STI laggards included Genting Singapore, down three cents to 87.5 cents on 29.8 million shares traded, and Golden Agri-Resources, which shed one cent to 42 cents on 33 million shares traded. Noble Group was yesterday's top active, rising 0.6 cent to 17.6 cents on 134.8 million shares traded, and reaching its highest point in over a month.

A version of this article appeared in the print edition of The Straits Times on January 04, 2017, with the headline 'S'pore shares start new year on positive note'. Print Edition | Subscribe