Bulls and bears

STI up on positive outlook for Greek bailout

Shares given a boost by expectations that Greece's Parliament will accept rescue deal

Expectations that the Greek Parliament would approve the controversial bailout deal to save the country from collapsing into economic chaos helped boost shares yesterday.

The benchmark Straits Times Index (STI) rose 22.36 points to 3,338.86, with 1.22 billion shares worth $807.1 million traded.

"Punters are betting on the Greek Parliament approving the deal, no matter how unpopular it is," said one remisier.

Blue-chip banking counters DBS, OCBC and UOB got a fillip ahead of testimony from US Federal Reserve chief Janet Yellen on the direction of monetary policy, with expectations for an interest rate hike by September. DBS rose 0.7 per cent or 15 cents to $21.20, UOB gained 1.1 per cent or 26 cents to $23.22, while OCBC edged upwards 0.2 per cent or two cents to $10.20.

Dr Yellen said last week that the Fed was looking to lift rates by year end, but an unexpected drop in US retail sales in June raised concerns that the world's biggest economy may be slowing.

Meanwhile, Chinese equities continued to retreat despite better-than-expected economic growth, which expanded 7 per cent in the second quarter from a year earlier, beating estimates for a 6.8 per cent increase. Shanghai fell 3.03 per cent, Shenzhen slipped 4.22 per cent and Hong Kong's Hang Seng was down 0.26 per cent.

"This suggests investors are not convinced that we have seen an end to slowing growth. Chinese equities are entering a period of consolidation in the coming months as market participants adjust to the slew of measures as well as the imminent withdrawal of such measures," IG market strategist Bernard Aw noted.

Elsewhere in Asia, Japan gained 0.38 per cent, Taiwan rose 0.14 per cent and South Korea inched up 0.66 per cent.

In Singapore, speculation that CEFC International may enter into joint ventures continued to fuel the penny play. It was the most actively traded counter yesterday, rising 35 per cent or 2.2 cents to 8.4 cents, with 134 million shares traded.

Nightclub operator and entertainment firm LifeBrandz requested a trading halt yesterday pending the release of an announcement.

The company had announced last week that it has entered into preliminary discussions with a third party in connection with a "very substantial acquisition or reverse takeover", although no definitive agreements have been reached.

OCBC Investment Research maintained a hold call on Ezra Holdings after it reported weaker-than-expected third-quarter earnings. Its shares slipped 1.3 per cent or 0.2 cent to 15.7 cents, with 14.9 million shares traded.

A version of this article appeared in the print edition of The Straits Times on July 16, 2015, with the headline 'STI up on positive outlook for Greek bailout'. Print Edition | Subscribe