Bulls And Bears

Higher oil prices, China's profit data lift stocks

Bank counters, Singtel and some energy plays are among the gainers

Singapore stocks closed higher yesterday as stronger economic data from China and higher oil prices gave a shot of much-needed adrenaline in an otherwise-thin trading day.

The Straits Times Index closed 0.51 per cent, or 14.71 points, higher at 2,885.76 after a three-day trading break. Market sentiment was buoyed by China's National Bureau of Statistics announcement that profits earned by large industrial firms rose 14.5 per cent last month from a year earlier, a big jump from October's 9.8 per cent rise.

Bank counters and Singtel led the market higher. OCBC rose 0.9 per cent, or eight cents, to $9.01, DBS Group gained 0.3 per cent, or five cents, to $17.44, while UOB advanced 0.2 per cent, or five cents, to $20.40. Singtel firmed by 0.5 per cent, or two cents, to $3.67.

"It is that time of the year when markets trade with hushed tones. Most markets... are likely to remain in this year-end slumber," IG market strategist Pan Jingyi said.

A recovery in oil prices helped boost some energy plays. Ezra Holdings was the most actively traded penny stock, jumping 11.4 per cent, or 0.5 cent, to 4.9 cents, with 58.5 million shares changing hands.

Rex International rose 3 per cent, or 0.2 cent, to 6.8 cents, with 13.5 million shares traded, while Ezion Holdings gained 2.7 per cent, or one cent, to 38 cents on a turnover of 9.6 million shares. Sembcorp Marine added 0.7 per cent, or one cent, to close at $1.385.

Brent rose to around US$53 a barrel yesterday after Saudi Arabia's energy minister said oil revenue could surge by 46 per cent next year after a deal between the kingdom and other producers to curb output.

But Maybank Kim Eng maintained a negative call on the offshore marine sector. "The Opec production cut has been driving a sentiment rally. But we think that 2017 may still not be an easy year," it said. It added that the price recovery may not come fast or strong enough to save some shipyards in Singapore. The broker has a sell call on Keppel Corp, which shed 0.2 per cent, or one cent, to $5.79 yesterday. Maybank noted that the conglomerate took out $230 million of provisions in full-year 2015, and does not rule out the potential for more significant writedowns. "Loss of offshore and marine... may affect its ability to fund dividends and investments in other business segments. Property earnings are insufficient to fill the gap," it said.

Other actively traded penny stocks included Noble Group, which gained 0.6 per cent, or 0.1 cent, to 16.2 cents on a turnover of 46.6 million shares. Equation Holdings shed 9.1 per cent, or 0.1 cent, to one cent, with 32.2 million shares changing hands.

Logistics facilities provider GLP edged up 0.9 per cent, or two cents, to $2.23 on news that it has secured a land parcel for logistics facilities development in Greater Tokyo for 133 billion yen (S$1.6 billion).

A version of this article appeared in the print edition of The Straits Times on December 28, 2016, with the headline 'Higher oil prices, China's profit data lift stocks'. Print Edition | Subscribe