Bulls And Bears

STI edges up on positive global sentiment

Investors encouraged by near-term certainty over impact of Brexit, according to analysts

Local shares ended yesterday's volatile session up a bit, while Asian markets had a mixed day.

Global sentiment remains positive, analysts said, with investors encouraged by the near-term certainty around Brexit's impact and potentially dovish monetary policies.

The benchmark Straits Times Index (STI) rose 3.41 points or 0.12 per cent to 2,928.76. Across the market, $1.04 billion worth of shares were traded.

After rising about 7.1 per cent since the Brexit sell-off on June 24, the STI is drawing near its year's high of 2,960 points in late April.

Risk sentiment has improved on the perceived stability around Brexit, CMC Markets analyst Margaret Yang said. "Investors liked the fact that a new British Prime Minister (Mrs Theresa May) has quickly come in, and she made clear that her government is in no rush to trigger Article 50," Ms Yang said, referring to the European Union mechanism for a member country's exit.

"The market is also discounting the impact of (Federal Reserve) rate hikes, with the general consensus that there will be only one hike by the end of this year."

Hopes of a Bank of Japan rate cut have been part of the boost. Tokyo was closed yesterday for a public holiday, but the Nikkei 225 had put on about 9 per cent over the past week. Hong Kong was up 0.67 per cent yesterday, and Sydney closed ahead 0.53 per cent, but Shanghai pared 0.35 per cent.

At home, 19 of the 30 STI components ended in the black, with top performer Global Logistic Properties closing up 3.5 cents or 1.84 per cent at $1.935, and Ascendas Real Estate Investment Trust up four cents or 1.64 per cent to $2.48.

"As global sentiments improve, foreign capital is seen coming back to Asian markets for yields," Ms Yang noted.

United Overseas Bank gained 19 cents or 1.01 per cent to $18.93, OCBC rose seven cents or 0.78 per cent to $9, and DBS added seven cents or 0.43 per cent for a 52-week high of $16.19.

Golden Agri-Resources was up half a cent or 1.41 per cent to 36 cents on 35.1 million shares transacted, making it one of the top actives. Thai Beverage closed up one cent or 1.05 per cent to 96 cents.

The 10 STI losers included ComfortDelGro, down 11 cents or 3.65 per cent to $2.90, and Sats, which dropped eight cents or 1.82 per cent to $4.32. Singtel fell four cents or 0.93 per cent to $4.24 as investors took profit on its recent strong run.

Outside the STI, Noble rose 0.3 cent or 1.76 per cent to 17.3 cents with 146.7 million shares traded. Spackman Entertainment, another top active with 25.1 million shares traded, shed 0.7 cent or 7.29 per cent to 8.9 cents.

SMRT remained suspended, with the firm under the spotlight as talk of a Temasek takeover emerges. SBS Transit closed down 19 cents or 7.04 per cent at $2.51, having hit its 52-week high last week.

A version of this article appeared in the print edition of The Straits Times on July 19, 2016, with the headline 'STI edges up on positive global sentiment'. Print Edition | Subscribe