Banking stocks help lift STI by 0.4% amid rising US Treasury yields

SINGAPORE - Shares in Singapore joined most regional peers to close higher on Oct 23, lifted by higher local banking share prices.

The Straits Times Index (STI) rose 13.37 points, or 0.4 per cent, to 3,600.78 even though only 12 or fewer than half of the 30 stocks on the benchmark finished higher.

Mr Zane Aw, research analyst at Phillip Securities Research, told The Business Times: “The three local banks, which make up almost 50 per cent of the STI’s weightage, are up between 0.5 and 1.3 per cent. This is likely why STI rebounded today.”

DBS Bank rose 20 cents, or 0.5 per cent, to $39.18; UOB was up 21 cents, or 0.7 per cent, at $32.30; and OCBC Bank surged 19 cents, or 1.3 per cent, to $15.37.

The banking trio might have been buoyed by the prospect of interest rates staying elevated as the 10-year US Treasury yield continued to rise on Oct 22, and comments from Federal Reserve officials tempered expectations for interest rate cuts.

Banks benefit from elevated interest rates as that would fatten their net interest margin.

Although builder Wee Hur said on Oct 17 that its A$1.6 billion (S$1.4 billion) student accommodation sale was not a done deal yet, its share price has risen 23.2 per cent since. That includes a 6.3 per cent, or three cents, increase on Oct 23 to 50.5 cents – a 52-week-high. It was also the most traded counter with a volume of about 34.4 million shares.

Across the broader market, there were 311 gainers against 222 losers, with nearly 1.2 billion securities worth $895.6 million changing hands.

THE BUSINESS TIMES