BullsAndBears

STI up slightly amid bargain hunting

Market activity boosted by investors seeking good buys; regional bourses also end in black

Local shares recouped some of their recent losses yesterday as investors returned to the bourse to hunt for bargains.

The Straits Times Index (STI) closed 11.6 points, or 0.37 per cent, higher at 3,137.88. Market activity also picked up slightly, with about 1.5 billion shares worth $1.1 billion transacted over the entire market.

Benchmarks elsewhere also ended in the black. Hong Kong rose 0.97 per cent and Shanghai put on a marginal 0.04 per cent. Sydney added 0.3 per cent. Tokyo, however, pared a tiny 0.01 per cent.

"I think the market is still in the consolidating phase and there's bound to be bargain hunters," remisier Alvin Yong said.

"There are actually still a lot of stocks trading at far below their book value, especially among the small and mid-caps."

Some of the stocks Mr Yong has been eyeing include Far East Orchard, which dropped one cent, or 0.6 per cent, to $1.67, and Koh Brothers Group, which rose one cent, or 3.39 per cent, to 30.5 cents. Their returns so far this year have ranged between 12 and 17 per cent.

Of the 30 blue-chip STI constituents, 12 stocks ended higher. Jardine Matheson Holdings put on US$1.47, or 2.3 per cent, to US$65.50, and ComfortDelGro rose five cents, or 1.92 per cent, to $2.66 on 14.03 million shares traded.

Sentiment towards the transport firm was likely cheered by the news that its subsidiary SBS Transit has won the third bus package tender from the Land Transport Authority.

DBS analyst Andy Sim maintained his buy rating for ComfortDelGro with a $2.94 target price, to account for its ability to deliver steady and consistent growth.

"Furthermore, the implementation of tighter regulations on private hire cars from July 1 should help to level the playing field," he added in a note yesterday.

All three banks rose. United Overseas Bank added 21 cents, or 0.97 per cent, to $21.75 after its annual general meeting. DBS Group Holdings closed 12 cents, or 0.64 per cent, higher at $18.91, and OCBC added seven cents, or 0.73 per cent, to close at $9.60.

Meanwhile 13 STI stocks fell, due partly to the sell-off on telco stocks. StarHub was the top loser, down five cents, or 1.78 per cent, to $2.76, and SingTel dropped two cents, or 0.53 per cent, to $3.74 with 20 million shares traded.

CapitaLand Commercial Trust eased one cent, or 0.61 per cent, to $1.62, despite the 9.6 per cent increase to its first quarter distribution per unit (DPU).

CapitaLand Mall Trust pared one cent, or 0.5 per cent, to $2.01 yesterday, before reporting a DPU of 2.73 cents - unchanged from a year ago.

Bourse operator Singapore Exchange also dropped before announcing a 7 per cent decline in its third-quarter net profit. It dipped three cents, or 0.4 per cent, to close the session at $7.45.

A version of this article appeared in the print edition of The Straits Times on April 21, 2017, with the headline 'STI up slightly amid bargain hunting'. Print Edition | Subscribe