Bulls And Bears

Bargain hunters help STI edge up 0.5%

ST Engineering, local banks advance; SIA among decliners as it imposes hiring freeze

A bargain-hunting session brought the Straits Times Index up 16.04 points or 0.51 per cent to 3,158.24 yesterday, following a sell-off at the start of the week as coronavirus cases soared in South Korea and Italy over the weekend.

Advancers outnumbered decliners 237 to 197 after about 1.62 billion securities worth about $1.32 billion changed hands.

With the jury still out on how long the virus outbreak will last, traders are trying to figure out what level of risk alert the market should be on, according to Mr Stephen Innes, chief market strategist at AxiCorp.

But with the uncertainty surrounding the full extent of the economic impact on the back of travel bans and airline suspensions, "traders are finding it more uncomplicated to toggle risk-off rather than on", he said.

Actively traded stocks included ST Engineering, which advanced 22 cents or 5.24 per cent to $4.42. This came after the company on Monday posted a 36.2 per cent rise in its fourth-quarter net profit to $169.5 million.

ST Engineering is well positioned to deliver a 10 per cent profit growth from last year to 2022 on the back of "a record-high order book, contributions from new acquisitions, and through continuing investments to expand its capabilities in aerospace and electronics", noted an RHB Securities report.

Banking stocks closed in the green after Monday's sell-off as investors looked to buy into dips for dividend-yielding plays.

While analysts expect revenues of banks to be impacted this financial year by the outbreak as they keep a tight rein on costs, the sector should see some support from dividend yields, according to a DBS report.

DBS Bank gained 0.32 per cent to $24.93, United Overseas Bank rose 0.48 per cent to $25.40, while OCBC Bank edged up 0.46 per cent to $10.97.

Among the decliners was Singapore Airlines, which fell 0.24 per cent to $8.46. This came as the national carrier introduced a hiring freeze and contemplates other cost-cutting measures amid the outbreak.

Other stocks most heavily traded by volume included Yangzijiang Shipbuilding, which closed at $1.01 with 23.9 million shares traded, while Genting Singapore ended at 86 cents on a trade of 37.9 million shares.

The Singapore bourse's performance was in line with some regional markets, including Malaysia, South Korea and Hong Kong.

A version of this article appeared in the print edition of The Straits Times on February 26, 2020, with the headline 'Bargain hunters help STI edge up 0.5%'. Subscribe