Bulls And Bears

STI joins region-wide rally on oil rebound

Asia's gains also follow Wall Street's upbeat betting on how Trump presidency will unfold

Regional markets enjoyed a solid session yesterday, with most key bourses including Singapore ending in the black as oil prices kept up their recent rebound.

Shanghai added 0.94 per cent, Hong Kong rose 1.43 per cent and Tokyo put on 0.31 per cent. Sydney closed 1.16 per cent higher.

Asia's gains followed the 0.47 per cent rise in the Dow Jones Industrial Average, which stayed around historic highs amid generally upbeat betting on how a Trump presidency is likely to unfold.

A further uptick in oil prices - with crude oil futures Brent rising above US$49 a barrel yesterday - provided another reason to cheer.

This was enough to overshadow news that President-elect Donald Trump intends to pull the US out of the Trans-Pacific Partnership the moment he takes office.

Singapore's benchmark Straits Times Index (STI) rose 5.53 points or 0.2 per cent to 2,822.20, with 2.17 billion shares worth $1.56 billion changing hands.

As the US dollar showed signs of plateauing after weeks of gaining ground, Asian and emerging markets should see further fund flows.

DBS' investment office believes the so-called "Trump trade" may continue for at least this week. "Risk assets could pause for breath heading into year end, or even correct as the markets reassess the speculative elements of the trade - that is go 'Trump off' while awaiting clarity on the incoming Trump administration's policies."

At home, 18 of the 30 STI components rose. Yangzijiang Shipbuilding led the pack, up three cents or 3.82 per cent to 81.5 cents. Genting Singapore added three cents or 3.14 per cent to 98.5 cents.

Since Nov 3, Genting has risen about 30 per cent, a "spectacular" showing, given the STI's relative lull, KGI Securities (Singapore) trading strategist Nicholas Teo said.

"The stock has been a beneficiary of recent analysts' upgrade. Many have been encouraged after its strong earnings report which suggested that it has managed to rationalise the exposure to the high-roller business… However, the stock is not cheap at 48 times forward price-to-earning ratio," he added.

Firmer oil prices, and expectations of a production freeze at the upcoming Opec meeting, lifted offshore marine and energy plays. Sembcorp Industries rose three cents or 1.13 per cent at $2.69, and Keppel Corp jumped six cents or 1.12 per cent to $5.41. Outside the STI, Ezion Holdings surged 2.5 cents or 8.06 per cent to 33.5 cents.

Thai Beverage was the top loser, paring 1.5 cents or 1.7 per cent to 86.5 cents.

StarHub slid two cents or 0.72 per cent to $2.77. Singtel pared five cents or 1.37 per cent to $3.60.

Outside the STI, film company Spackman Entertainment closed up 0.8 cent or 5.76 per cent at 14.7 cents on 146.7 million shares traded. Its industry peer mm2 Asia ended flat at 45.5 cents.

A version of this article appeared in the print edition of The Straits Times on November 23, 2016, with the headline 'STI joins region-wide rally on oil rebound'. Print Edition | Subscribe