Bulls And Bears

STI hits 15-month high despite US jitters

Bank, palm oil plays lift local bourse as Wall Street declines on fears over Trump policies

Singapore shares rose to a 15-month high despite Wall Street jitters over the policies of US President Donald Trump, aided by bank, palm oil and infrastructural plays.

The benchmark Straits Times Index (STI) closed 16.47 points or 0.54 per cent higher at 3,041.95, touching its highest level since October 2015.

Trading was fairly busy, with 1.9 billion shares worth $1.29 billion traded across the entire market.

This was a contrast to Wall Street, with the Dow Jones Industrial Average paring 0.14 per cent overnight on rising concerns that the Trump administration may be more into protectionist policies than stimulating growth through fiscal stimulus.

The greenback dipped to its lowest point since last month, about 1.419 to the Singdollar. This may have spurred fund flows away from US-dollar assets and into Singapore, KGI Securities Singapore trading strategist Nicholas Teo said.

"It remains uncertain if this trend can continue further or not. For the time being, though, the STI has expressed a steady performance highlighting this fund flow into local stocks, especially into the dominant weighted blue chip names."

Of the 30 STI stocks, 18 ended in the black, led by Hutchison Port Holdings Trust which rose one US cent or 2.38 per cent to 43 US cents.

Sembcorp Industries was also up, gaining seven cents or 2.19 per cent to $3.27, while Keppel Corp put on eight cents or 1.27 per cent to $6.36.

The two palm oil stocks both rose. Wilmar International went up nine cents or 2.33 per cent to $3.95 and Golden Agri-Resources added half a cent or 1.19 per cent to 42.5 cents.

Regional palm oil production is expected to speed up this year, which may put some pressure on palm oil prices. Still, as a positive market indicator, the Malaysian Palm Oil Board recently said prices are likely to average RM2,700 to RM2,800 a tonne this year, up from last year's RM2,656.9 average.

In the banking sector, DBS Group Holdings rose 32 cents or 1.74 per cent to $18.66, OCBC Bank put on two cents or 0.21 per cent to $9.38, and United Overseas Bank put on one cent or 0.05 per cent to $20.96.

At the other end of the spectrum, the two CapitaLand trusts were among the 11 blue chips to fall. CapitaLand Commercial Trust pared five cents or 3.19 per cent to $1.515. CapitaLand Mall Trust was down one cent or 0.51 per cent to $1.95.

The two counters have been positively rated by market analysts, but investor concerns will likely linger over a weak retail landscape and an oversupply of commercial properties, both bad for rentals.

Outside the STI, property trusts were talking points, with several tabling their results this week. Keppel Real Estate Investment Trust rose half a cent or 0.48 per cent to $1.045, ahead of unveiling lower fourth-quarter and full-year distribution per unit (DPU) yesterday. Keppel DC Reit, which also posted a drop in DPU on Monday, slid one cent or 0.82 per cent to $1.205.

A version of this article appeared in the print edition of The Straits Times on January 25, 2017, with the headline 'STI hits 15-month high despite US jitters'. Print Edition | Subscribe