Bulls And Bears

STI recovers after China lifts circuit breaker

Asian markets rebound after Beijing removes system blamed for sell-off

Singapore shares rebounded in line with a recovery in regional equities after the Chinese authorities removed a mechanism blamed for triggering volatility in Chinese stocks.

The Straits Times Index closed up 21.32 points at 2,751.23, but was down 4.56 per cent for the week.

The recovery was led by Singtel, which jumped 2.6 per cent or nine cents to $3.55, with 34.6 million shares traded. A rebound in oil also boosted commodity plays Wilmar International, up nearly 4 per cent, or 11 cents, to $2.87, and Golden Agri-Resources, which rose 6.1 per cent, or two cents, to 35 cents.

Other gainers included SGX - 2.1 per cent, or 15 cents, ahead at $7.41.

Among the banks, OCBC Bank rose 0.4 per cent, or three cents, to $8.40. UOB also gained, rising three cents to end at $18.41. DBS Group Holdings added two cents to close at $15.72.

Both UOB and OCBC announced memorandums of understanding to promote investments and trade in China's Chongqing yesterday.

Shanghai gained nearly 2 per cent yesterday after a circuit breaker system investors blamed for exacerbating this week's massive sell-off was suspended. Hong Kong was up 0.6 per cent and South Korea rose 0.7 per cent.

Moves by China to lift the yuan's value and direct state-controlled funds to buy shares also helped calm nerves.

As worries over China eased, investors shifted their attention to United States payroll data, to be released early this morning, that may provide clues on the timing of Federal Reserve interest rate increases.

"If the job report is good, then the market rally may continue next week. The upcoming US inflation data is also expected to be weak, which translates to slower pace of rate hikes," remisier Alvin Yong said.

Noble Group was the most active stock traded yesterday with 185.8 million shares changing hands.

The counter closed 1.5 per cent down at 34 cents after the commodity trader was hit with a second credit-rating downgrade.

The second most active counter was China Sports, which skyrocketed 26.7 per cent, or 0.4 cent, to 1.9 cents with 81.7 million shares traded after substantial shareholder Osim International boosted its stake to 14.16 per cent on Dec 31, from 9.34 per cent.

Stratech was another active stock as it edged up 5 per cent to four cents on a volume of 75.5 million shares.

One stock in the spotlight was HTL International. It shot up 17.5 per cent, or 12 cents, to 80.5 cents after it announced on Thursday that Ideal Homes International, a unit of Guangdong Yihua Timber Industry, plans to acquire HTL for about $399.8 million via cash.

HTL, which resumed trading yesterday after a four-day trading suspension was lifted, was hotly traded despite the company's warning on Thursday that the announcement should be not construed as a "firm intention" of an offer.

A version of this article appeared in the print edition of The Straits Times on January 09, 2016, with the headline 'STI recovers after China lifts circuit breaker'. Print Edition | Subscribe