Singapore market regains ground, STI closes 30 points up

The market rose 30.29 points or 0.99 per cent to 3,091.78.
The market rose 30.29 points or 0.99 per cent to 3,091.78. PHOTO: BLOOMBERG

SINGAPORE - After falling over 4 per cent in the first two trading days of the week, the Singapore market regained some ground as investors picked up some bargains.

The market rose 30.29 points or 0.99 per cent to 3,091.78.

Those numbers are nothing to sniff at, but RHB Securities has warned that the market is likely to stay volatile for the time being as investors grapple with the fallout of China's devaluation of the yuan.

"Brace for further near-term onslaught," the brokerage said in a note yesterday.

"We believe China's currency move will decrease the appetite for risky assets in Singapore in the near term. Downside risk includes other central banks being forced to follow suit, which may trigger a fresh round of currency weakening in the emerging economies."

The brokerage said investors should be especially cautious about putting money into companies that earn revenues in foreign currencies, given current fluctuations in the Singapore dollar.

"We favour stocks that rely solely on domestic demand or generate revenue or lock-in contracts in the US dollar (or currencies pegged to the USD). Stay defensive in this climate," RHB Securities added.

Other regional bourses also staged a so-called "relief rally" on Thursday, after China's central bank said it would intervene if the yuan weakens too much.

Tokyo closed up 0.99 per cent, Hong Kong rose 0.4 per cent and Shanghai advanced 1.8 per cent. Sydney rose 0.11 per cent and Seoul climbed 0.4 per cent.

Banking stocks at home, which led losses on Wednesday, ended higher. DBS Group increased 38 cents to $19.02, OCBC Bank added 18 cents to $19.68 and United Overseas Bank gained 37 cents to $20.35.

Commodity players, also among the worst hit in the market rout earlier this week, regained some ground. Olam International rose three cents to $1.76, Wilmar International increased two cents to $3.05 and Golden Agri Resources added 1.5 cents to 32 cents.

Noble Group slipped half a cent to 50 cents, after ratings agency Moody's cut its outlook on the company's debt from "stable" to "negative".

SingTel also enjoyed a positive close, after reporting a 12.8 per cent risein its first quarter net profit yesterday morning. Its shares gained nine cents to $3.98.

yasminey@sph.com.sg