Singapore equities bounced back yesterday, as positive sentiment on Wall Street spilled over into Asia.
The Straits Times Index (STI) shot up 42.95 points, or 1.34 per cent, to 3,258.65. Some 973.1 million shares worth $1.13 billion were traded.
Traders in the United States were cheered by the results of the Federal Reserve's latest annual stress test - in which all the 34 banks passed - sending the Dow Jones Industrial Average up by 0.68 per cent.
"The stress-test results further strengthened investors' confidence in the economic outlook and health of the financial system," said CMC Markets Singapore market analyst Margaret Yang.
Other markets in Asia fared well too. Hong Kong rose 1.1 per cent, Shanghai was up 0.47 per cent and Tokyo put on 0.45 per cent. Jakarta was still closed for the holidays.
Much of the gains on the STI came from the local lenders. United Overseas Bank led the pack with a solid 2.5 per cent or 58-cent gain to $23.52. DBS Group Holdings jumped 2.5 per cent or 50 cents to $20.86, while OCBC Bank advanced 1.9 per cent or 20 cents to $10.95.
Still, Maybank Kim Eng believes that while the worst of the oil and gas non-performing loan (NPL) worries for the banks has abated, the risks continue to linger, especially with oil prices now back at levels of around US$46 a barrel - a level not seen since November last year.
"The Singapore banks have not really cut back on their exposures to these sectors. Since DBS/OCBC's oil and gas support services NPL ratio is 22 to 23 per cent, the pace of delinquency should ease, but credit costs may scale higher," it said, maintaining a "neutral" call on the sector.
Outside of the blue chips, Croesus Retail Trust pushed higher in heavy trade, climbing 0.9 per cent or 1 cent to $1.185, following news on Wednesday that American private equity firm Blackstone has made a cash offer to privatise the trust at $1.17 a unit. PhillipCapital in a report recommended that shareholders accept the offer, which represents an 8 per cent premium to the brokerage's last target price of $1.08 and a 27 per cent premium to the trust's latest net asset value. "The offer price is close to the average premium for listed retail J-reits," it said.
Healthcare firm TalkMed Group jumped 5.4 per cent or 3.5 cents to 68 cents. The rebound comes a day after the counter sank more than 13 per cent following news that the firm's chief executive, Dr Ang Peng Tiam, was suspended for eight months after a failed appeal against a conviction of professional misconduct and a $25,000 fine.
Disa, formerly known as Equation Summit, retained its spot as the top active stock, slumping 7.1 per cent or 0.1 cent to 1.3 cents on 110.1 million shares done.