Singapore shares rebound but markets brace for more declines

The benchmark Straits Times Index gained 42.9 points, or 1.51 per cent, to close at 2,886.29.
The benchmark Straits Times Index gained 42.9 points, or 1.51 per cent, to close at 2,886.29. PHOTO: AFP

SINGAPORE - Singapore shares rebounded on Tuesday as investors hunted for bargains after 4.3 per cent plunge the day before, but analysts are convinced this is simply a blip with more declines to come.

The benchmark Straits Times Index gained 42.9 points, or 1.51 per cent, to close at 2,886.29.

"It was a technical rebound driven by bottom-fishing bargain hunters, because the markets were over-extended," said remisier Desmond Leong.

Several other regional bourses recovered some ground too - Hong Kong gained 0.72 per cent, Sydney rose 2.72 per cent, while Seoul advanced 0.92 per cent.

Shanghai stocks, however, extended their losses, plummeting 7.6 per cent in their worst four-day rout since 1996, while Tokyo dropped 4 per cent to a six-month low.

"I received three calls an hour yesterday, compared with eight an hour on Monday," said remisier Alvin Yong. "I have a lot of concerned clients because they saw the STI plunge more than 100 points on Monday, so people were panicking and worrying. Others were opportunistic, and I told them to buy, and that blue chips offer the best bet."

Blue chips were certainly among the winners on Tuesday, with banking stocks leading gains.

DBS Group added25 cents to S$17.90, OCBC Bank rose 26 cents to S$8.96 and United Overseas Bank climbed 70 cents to S$19.25.

Commodity plays were mixed. Noble Group, which has come under recent pressure amid accusations of accounting fraud and governance lapses, yesterday gained 5.5 cents to 46.5 Singapore cents.

Despite the recent market turbulence, the Singapore Exchange noted in a report on Tuesday that the three largest media firms on the bourse have made an average gain of 7 per cent since the end of June.

"Together the three stocks - Singapore Press Holdings (SPH), Asian Pay Television Trust and mm2 Asia - have marginally outperformed the MSCI World Media Index in the year thus far, while maintaining a similar price-to-earnings ratio and varied price-to-book ratios," the SGX said.

gleong@sph.com.sg