BULLS AND BEARS

Shares rebound after gains on Wall Street

Traders also hoping for fresh round of stimulus measures in China

SINGAPORE shares staged a modest rebound on Wall Street gains overnight and hopes that China may introduce another round of stimulus measures.

The benchmark Straits Times Index managed to cling to the key 3,300-point support. It jumped as much as 18.11 points to 3,318.53 at the opening yesterday before closing at 3,300.96, up just 0.54 point, and down 1.6 per cent for the week.

Some 1.33 billion shares worth $1.13 billion changed hands.

Elsewhere in Asia, Chinese equities continued to slide on concerns over high valuations of smaller companies and as regulators stepped up a crackdown on margin lending. Shanghai plunged 6.4 per cent and Shenzhen sank by 5.9 per cent.

Jinkuang Investment Management chief strategist Zhang Haitong told Bloomberg: "We may be close to the end of the correction as the tone of loose monetary policies isn't changed. We may see cuts in interest rates or reserve requirement ratios again as the economy is still sluggish."

Banking counters DBS Group and OCBC rebounded while UOB slipped as traders squared positions. DBS closed 0.5 per cent or 10 cents higher at $20.68, OCBC rose 0.4 per cent or four cents to $10.07 and UOB slid 0.4 per cent or 10 cents to $22.90.

Magnus Energy plunged 13.3 per cent after it said it could not explain the more than 70 per cent surge in its share price on Thursday. In a filing to the Singapore Exchange late on Thursday, Magnus said that it had issued 34.5 million new shares following the conversion of previously issued notes, and that a unit had entered into a redeemable convertible loan agreement for $5 million.

Magnus shed 0.8 cent to 5.2 cents, with 71.2 million shares changing hands, and was one of the most actively traded stocks.

Jardine Cycle & Carriage came under more pressure after it announced a one-for-nine rights issue to raise US$772 million to pay down debt. The car retailer slid 1.2 per cent or 45 cents to $35.61 after the announcement. The rights shares will be sold at $26 each, a 28 per cent discount to its Thursday's closing price.

Goldman Sachs, reiterating its "neutral" call on the stock, said the rights issue will cause a reduction of between 9 per cent and 10 per cent in the company's earnings per share in 2015 and 2016 due to the enlarged share base. However, the savings on interest expenses will add between 1 per cent and 2 per cent to the company's net profit, it said.

Ley Choon Group jumped nearly 12 per cent or 0.7 cent to 6.7 cents after snagging a $25 million contract from Changi Airport Group to resurface the airport's taxiways.

gleong@sph.com.sg

A version of this article appeared in the print edition of The Straits Times on June 20, 2015, with the headline 'Shares rebound after gains on Wall Street'. Print Edition | Subscribe