Local stocks held firm yesterday, and closed the week on a high note as investors braced themselves for potentially market-shattering events following Greece's referendum tomorrow.
The benchmark Straits Times Index ended 14.89 points, or 0.45 per cent, up at 3,342.73, and up 0.66 per cent for the week, no mean feat given Monday's 1.23 per cent fall. Overall trading volume yesterday was up, with 1.26 billion shares traded.
The positive close here was in contrast to Wall Street, where anxiety over Greece gripped sentiment and sent shares down 0.16 per cent overnight despite another month of solid job growth in the United States.
IG market analyst Bernard Aw is not convinced the local market is in a sustained rally and expects more volatility next week. "While we now have two consecutive weekly gains, they came after two months of extended drop. I still see this as a technical rebound," he said.
If the referendum outcome is unfavourable, next Monday could be very volatile, he warned: "Watch the 3,300 support level. If STI breaks below that, there may be further downside through the week."
1. The market is in for more volatility next week, given Greece's deepening debt crisis and the United States jobs data that came out last night.Adding to the uncertainty is the turmoil in Shanghai as the heavy sell-off continues.
2. As oil prices weakened slightly this week, French energy firm Total has started operations at a new lubricant oil plant in Singapore, its largest such facility in the world. Total seeks to double its volumes in Asia over the next 10 years.
3. UOB-Kay Hian chairman Wee Ee Chao has made a modest share purchase in the firm. He snapped up 35,000 shares at $1.49861 apiece, or about $52,000 all up. Shares of the brokerage closed unchanged yesterday at $1.50.
4. Enhancements to Singapore's real estate investment trust regime, unveiled on Thursday, are positive as they will foster financial discipline, boost corporate governance and strengthen investor confidence, Moody's Investors Service said.
5. Property player Perennial Real Estate Holdings is making an ambitious move in China with the inking of a joint venture agreement yesterday. It will jointly develop and manage some major hospital and medical services businesses.
CapitaLand Mall Trust was yesterday's top-performing blue chip, up five cents, or 2.36 per cent, to $2.17. The gain came after the Monetary Authority of Singapore unveiled proposed measures on Thursday to ensure better protection and accountability for investors of real estate investment trusts (Reits). Ascendas Reit gained one cent, or 0.41 per cent, to $2.42, while Ascott Residence Trust went up 0.5 cent, or 0.38 per cent, at $1.305.
Banks also ended higher. DBS closed 41 cents, or 2 per cent, up at $20.91, OCBC gained eight cents, or 0.79 per cent, to $10.23, while United Overseas Bank rose 10 cents, or 0.43 per cent, to $23.40.
The banking sector will remain the market highlight in the coming weeks, as it is likely to report another set of robust earnings for the second quarter, Mr Aw said.
On the other end of the ledger, Jardine Cycle & Carriage was the day's top loser, closing 52 cents, or 1.61 per cent down, to a new 52-week low of $31.68. But in a note yesterday, Mr Paul Yong at DBS Equity Research upgraded the counter's rating to hold, highlighting its recent rights issue to raise US$768 million (S$1 billion) as a sign that the group will see an improved balance sheet and fresh funds for acquisitions.
Energy firm Ezra dropped 0.9 cent, or 5.45 per cent, to 15.6 cents with over 60 million shares traded. The company is issuing 1.9 billion rights shares at 10.5 cents apiece.
In other Asian markets, Shanghai lost 5.77 per cent as fears of a full-blown crash continue to build up. The central bank said yesterday that it has rolled over 250 billion yuan (S$54.3 billion) of mid-term loans to banks to boost liquidity.
Hong Kong lost 0.83 per cent, while Tokyo managed to eke out a marginal a 0.08 per cent gain after a largely downbeat session.