Bulls And Bears

STI inches up on China's market gains

Global growth concerns drive local bourse down in early trading before recovery

Singapore shares ended a tad higher as positive sentiment over gains in Chinese stocks erased early session losses from a negative Wall Street lead.

The Straits Times Index (STI) slipped 0.8 per cent at the opening bell, as global growth concerns spurred investors to sell riskier assets. But the STI recovered to close 2.68 points or 0.09 per cent higher at 2,882.27 as Chinese stocks rose.

Shanghai jumped 1.89 per cent and Shenzhen surged 3.55 per cent, led by a rally in industrial and technology companies on speculation that they may see increased orders following President Xi Jinping's first state visit to the United States.

But most other Asian bourses closed in negative territory yesterday as the delay in federal funds' rate lift-off generated more uncertainty and pessimism over emerging markets and global growth.

This week, volume is likely to be thin owing to the shorter trading week. Markets here will be closed on Thursday for Hari Raya Haji.

The new STI constituents - UOL Group, Yangzijiang Shipbuilding and Sats - traded higher as investors bought on expectations that some funds, including exchange traded funds tracking the STI, are rebalancing their portfolios to reflect the new set-up. UOL closed nearly 1 per cent or six cents higher at $6.08; Yangzijiang rose 2.1 per cent or 2.5 cents to $1.19; while Sats gained 2.9 per cent or 11 cents to $3.91.

"However, given their tiny weighting, around 3.4 per cent, their rallies have hardly any impact on the overall index," IG market strategist Bernard Aw said.

Thai Beverage was the biggest gainer in terms of weighting, up 3 per cent or two cents to 68.5 cents, while Noble Group was the biggest laggard, losing 4.1 per cent or two cents to 47 cents. The most actively traded counters included International Healthway Corp (IHC) and Healthway Medical Corp.

IHC, upon the lifting of its trading suspension, plummeted nearly 69 per cent or 21.6 cents to 9.9 cents, with 274.5 million shares traded.

IHC had requested last week for a trading suspension on its shares, to allow it time to revise the terms and conditions of the implementation deal that spells out how its proposed scheme of arrangement should pan out. Under it, IHC will buy all the shares of Healthway Medical Corp at 10 cents apiece via the issuance of new IHC shares at 45 cents apiece.

Healthway, which sought a trading suspension yesterday morning and had it lifted by the afternoon, fell 26 per cent or one cent to 2.8 cents with 84.9 million shares traded. "There is uncertainty over whether the deal can be completed due to the numerous ways in which the deal can be terminated," remisier Alvin Yong said.

A version of this article appeared in the print edition of The Straits Times on September 22, 2015, with the headline 'STI inches up on China's market gains'. Print Edition | Subscribe