Bulls And Bears

STI down; investors hunt for bargains

Noble Group notches up 40% monthly gain as some funds invest in the commodity player

The local market stumbled into the red yesterday, but there was some buzz outside the blue-chip segment as investors and foreign funds went bargain hunting.

Noble Group stood out with 316.3 million shares traded - far and away yesterday's top active counter - as it added 0.8 cent or 4.71 per cent to 17.8 cents, pushing the monthly gain to around 40 per cent.

"Franklin Templeton has resumed buying into Noble, and several more funds may be eyeing for a speculative buy. These institutional fund flows could be what stirred the sentiment," a trader who requested anonymity told The Straits Times.

An SGX announcement by Noble on Sept 30 showed that Franklin Templeton Institutional has increased its shareholding from 5.97 per cent to 6.03 per cent.

CMC Markets senior sales trader Alex Wijaya added: "Noble shares have been severely punished over the past year. With oil prices rebounding it's not surprising that people are bargain hunting on it to seek exposure to the commodity sector."

The same mentality was also evident on The Straits Times Index, which closed down 2.85 points or 0.1 per cent at 2,881.79.

Keppel Corp was the top gainer among the 18 blue chips that rose yesterday.

Keppel put on eight cents to $5.39, shrugging off the market jitters earlier this week around the Petrobras probe.

Sembcorp Industries added three cents to $2.61, while Sembcorp Marine gained two cents to $1.32 outside the STI. Ezra Holdings also rose, up 0.2 cent to six cents.

These were likely market reactions toward the recent rise in oil prices. Crude benchmark Brent futures hit above US$51.50 a barrel yesterday. Oil punters are turning bullish as the Opec meeting to detail production cut draws near.

Meanwhile, Hong Kong Land Holdings led the losers on the STI, dropping 23 US cents to US$6.92. CapitaLand Mall Trust shed four cents to $2.13, and Thai Beverage dropped one cent to 98.5 cents.

Said remisier Alvin Yong: "The overall market sentiment remained jittery, but the search for safety and value has pushed some investors to healthy small caps with a strong cash position. Metro Holdings is one of these, and PEC another."

PEC, in the oil and gas sector, was off half a cent at 61.5 cents, while department store operator and property company Metro added three cents to $1.02.

OCBC analyst Jodie Foo regards Sheng Siong Group as another good defensive choice. The supermarket operator was down one cent at $1.065.

"Competition remains keen for the local grocery sector, yet against this backdrop, we continue to see overall revenue growth next year for the group," she said in a note yesterday, raising her target price for Sheng Siong to $1.15.

A version of this article appeared in the print edition of The Straits Times on October 06, 2016, with the headline 'STI down; investors hunt for bargains'. Print Edition | Subscribe