Bulls And Bears

Stocks rise on back of Wall St gains

Local bank counters gain, taking the lead from global rally in financial stocks

Local stocks rose on Wall Street's gains as Federal Reserve chairman Janet Yellen confirmed views that the US economy is strong enough to take an interest rate rise soon.

The Straits Times Index added 0.89 per cent or 25.17 points to 2,838.65, ending the week up 0.85 per cent.

Investors have been pouring money into the greenback and financial stocks, with many tipping a more expansive fiscal policy under President-elect Donald Trump.

US banks have done well since the election as Mr Trump's administration is expected to loosen regulations for financial institutions.

Banks here have taken the lead from the global rally in financial stocks. DBS jumped 0.4 per cent or seven cents to $16.50, OCBC gained 0.5 per cent or four cents to $8.87, while UOB rose 0.7 per cent or 13 cents to $19.56.

Banks are also favoured as tighter domestic funding amid a weaker Singdollar is raising short-term interest rates. Higher interest rates generally mean a bank's net interest margins rise.

Genting Singapore was one of the most active, up 6.25 per cent or 5.5 cents to 93.5 cents, with 61.4 million shares traded. The casino operator said it will sell its 50 per cent stake in Resorts World Jeju to its joint venture partner for US$420 million (S$597 million) in cash.

But Maybank Kim Eng downgraded the counter to a sell from hold, saying the Genting rally is "unwarranted" as gaming volumes remain at record lows and its "foray into Japan is far from certain".

Singtel helped lift the bourse, rising 1.09 per cent or four cents to $3.71, with 21.9 million shares traded. Other hotly traded counters included Noble Group, which dipped 1.7 per cent or 0.3 cents to 17.8 cents, on trade of 113.2 million shares.

Spackman Entertainment fell 1.4 per cent or 0.2 cent to 13.7 cents, with 42.3 million shares changing hands, while Golden Agri-Resources was flat at 39.5 cents on trade of 33 million shares.

Sen Yue, formerly known as PNE Micron, jumped 32 per cent or 0.8 cent to 3.3 cents, with 30.7 million shares traded.

The commodities trading firm, which was queried yesterday by the Singapore Exchange over unusual price movement, said it could not explain the trading activity.

Construction firm Swee Hong jumped 8.3 per cent or 0.1 cent to 1.3 cents, with 40.8 million shares traded after it returned to the black with a net profit of $2.9 million for the first quarter. Revenue for the quarter more than doubled to $12.5 million.

DBS Group Research said oil and gas stocks could face uncertainty heading into the Opec meeting on Nov 30 as investors watch whether the cartel can finalise an agreement to curb production.

Ezion Holdings slipped 1.6 per cent or 0.5 cent to 30.5 cents, while KrisEnergy fell 3.03 per cent or 0.5 cent to 16 cents.

A version of this article appeared in the print edition of The Straits Times on November 19, 2016, with the headline 'Stocks rise on back of Wall St gains'. Print Edition | Subscribe