BullsAndBears

STI inches up amid tensions after US strike

Geopolitical stresses following missile attack on Syria could affect sentiment, say analysts

Local stocks ended a tad higher after disappointing US employment data and heightened geopolitical tensions in the wake of the US missile strike on Syria last week.

The Straits Times Index rose 4.18 points, 0.13 per cent, to 3,181.45.

"We are keeping our fingers crossed that investors can put this event (the US missile attack) aside soon enough and focus on the other key events happening - the Monetary Authority of Singapore's policy meeting on April 13, the French presidential elections on April 23, and the first-quarter results season," DBS Group Research said in a report yesterday.

DBS chief investment officer Lim Say Boon noted that geopolitics "do matter where conflicts involve two or more major powers, with the ability to escalate to a point where they impact economies significantly. And Russia has an oversized military. So the markets' muted initial response may not be the final word on the US missile attack on Syria".

"Should tensions in the Middle East escalate, defensive stocks such as Thai Beverage may outperform. ST Engineering may benefit through its defence arm," DBS said.

ST Engineering gained two cents, or 0.5 per cent, to $3.67, while ThaiBev shed 0.5 cent, or 0.5 per cent, to 93.5 cents despite a buy call from RHB.

"We expect to see an upturn for ThaiBev now that the 100-day mourning period for the Thai king is over. Following the Songkran festival, we expect alcohol consumption to normalise," the broker said.

KS Energy fell two cents, or 23.8 per cent, to 6.4 cents after news that the executive chairman and chief executive of the offshore marine company and his son, an executive director, were being probed by the Commercial Affairs Department.

CWT jumped 19 cents, or 9.2 per cent, to $2.26 after Hong Kong- listed HNA Holding made a voluntary general offer to buy out the logistics player at $2.33 a share, valuing it at about $1.4 billion.

OCBC Investment Research yesterday recommended that shareholders accept the "attractive" offer. "CWT shareholders who accept the voluntary general offer, if and when made, will be entitled to retain the full-year 2016 proposed final dividend of three cents a share payable on May 17," the broker said.

New listing UnUsUaL made a sterling debut yesterday, closing at 43.5 cents, more than double its offer price. It had offered 96.99 million new shares at an issue price of 20 cents via private placement.

Other actively traded counters included Moya Asia, up 0.7 cent, or 9.6 per cent, to eight cents, with 69.2 million shares traded; and Genting Singapore, which gained 3.5 cents, or 3.4 per cent, to $1.07, with 49.6 million shares changing hands.

A version of this article appeared in the print edition of The Straits Times on April 11, 2017, with the headline 'STI inches up amid tensions after US strike'. Print Edition | Subscribe