Bulls and bears

STI climbs on positive Greece, China news

Change in market mood as Grexit fears recede, Beijing intervention stems stock rout

Traders finally had some good news to latch onto yesterday and they made the most of it.

The change in mood on the back of a compromise deal on Greece hashed out over the weekend sent the benchmark Straits Times Index (STI) up 31.34 points to 3,311.22. About 1.41 billion shares worth $799.6 million were traded.

"The worst-case scenario is now off the table. There isn't going to be a Grexit for now, but the devil is in the details," one remisier said yesterday. "Without this news, the local market would have been dead. But the successful resolution of this issue will remove overhang on the STI for now.

"Those who took a chance and bought into the market on Friday at the 3,280 levels would have been rewarded today."

China also provided a positive lead for most Asian bourses after unprecedented government intervention to end a share market rout that eroded almost US$4 trillion (S$5.4 trillion) of market value finally gained traction, helping Shanghai to rebound 13 per cent in the past three trading days.

Panic selling had led more than half the listed firms on the Shanghai and Shenzhen exchanges to request trading halts but that had fallen to 36 per cent by yesterday, according to Bloomberg.

"Some of the management of the suspended companies must have felt confident enough to lift the trading halt after seeing a sustained rally for the past two days," the remisier said.

Shanghai shares rose 2.39 per cent yesterday while Hong Kong gained 1.3 per cent, Japan added 1.57 per cent, Taiwan rose 1.34 per cent and South Korea advanced 1.49 per cent.

Blue chips here put on a strong performance as Grexit fears receded. Bank counter DBS jumped 1.5 per cent or 31 cents to $20.95, while UOB rose 0.9 per cent or 20 cents to $22.96. Singtel climbed 1.9 per cent or eight cents to $4.37.

Penny plays were among the most actively traded. CEFC International received a trading query yesterday from the Singapore Exchange for "unusual price and volume movements" in its shares. The firm's stock skyrocketed 76 per cent or 2.6 cents to six cents, with 69.5 million shares traded. CEFC, in its response yesterday, said it had issued an announcement about discussions on potential joint ventures on July 7 and was also "internally evaluating fund raising options".

"There is no certainty that any of these potential joint ventures will materialise or that the funding could be obtained," the firm said.

Fellow penny play Vallianz jumped 8 per cent or 0.4 cent to 5.4 cents, with 52.3 million shares traded, while IHC was flat at 30 cents, with 57.2 million shares traded.

Commodities company Olam International slumped 2.74 per cent or five cents to $1.775, its lowest level in well over a year, as commodity prices remain volatile.

A version of this article appeared in the print edition of The Straits Times on July 14, 2015, with the headline 'STI climbs on positive Greece, China news'. Print Edition | Subscribe