BullsAndBears

Better economic outlook nudges STI up

But gains erased by investor disappointment that Opec didn't make bigger production cuts

Singapore shares closed a tad higher as investor disappointment that Opec did not make deeper oil production cuts erased gains driven by forecasts of better Singapore economic growth this year.

The Straits Times Index finished just 0.1 per cent, or 3.13 points, higher at 3,234.37.

The bourse got a lift from one of the most hotly traded counters, Genting Singapore, which climbed 1.3 per cent, or 1.5 cents, to $1.175, with 51.8 million shares traded. Yangzijiang Shipbuilding edged up 0.8 per cent, or one cent, to $1.27.

Property counters CapitaLand jumped 1.7 per cent, or six cents, to $3.53, City Developments gained 1.1 per cent, or 11 cents, to $10.49 and UOL Group rose 0.9 per cent, or six cents, to $6.93.

Buoying sentiment earlier yesterday was news that Singapore's economic growth this year is likely to be better than last year's 2 per cent on an improving global outlook. But the Government kept its earlier forecast range of 1 to 3 per cent.

First-quarter overall growth numbers were also revised upwards to 2.7 per cent from an earlier 2.5 per cent, lifted largely by a resurgent manufacturing sector.

Strong growth in the electronics and precision engineering segments will likely provide support to the local economy, owing to a cyclical upturn in the global semiconductor industry, which represents 17 per cent of Singapore's total manufacturing output.

There are 12 Singapore-listed semiconductor companies with a combined market capitalisation of $1.2 billion. Riding on the industry's uptrend, these 12 stocks generated an average total return of 65.7 per cent in the year-to-date, bringing their one-year average returns to 115.6 per cent, according to a report by SGX My Gateway.

Among them are UMS Holdings, which jumped 5.9 per cent, or seven cents, to $1.25. DBS Equity Research, which has a buy call on the counter, said it is well-positioned to benefit from increased global semiconductor equipment spending and plans to add production capacity.

Addvalue Tech was the most hotly traded counter, jumping 8.8 per cent, or 0.5 cent, to 6.2 cents, with 168 million shares traded. Sunright rose 7.4 per cent, or 3.5 cents, to 50.5 cents, while Avi-Tech Electronics gained 2.2 per cent, or one cent, to 46 cents.

Lower oil prices weighed on oil and gas plays like Keppel Corp, which dipped 0.2 per cent, or one cent, to $6.58; Sembcorp Industries lost 0.9 per cent, or three cents, to $3.19 and SembMarine shed 0.6 per cent, or one cent, to $1.71.

Other actively traded counters included property firm HLH, which was flat at 0.9 cents, with 87.4 million shares traded. Rowsley gained 4.6 per cent, or 0.4 cent, to 9.1 cents on 48.8 million shares traded.

Meanwhile, after the past two days of carnage, Noble Group rebounded 9.1 per cent, or 3.5 cents, to 42 cents, with 51.4 million shares traded.

A version of this article appeared in the print edition of The Straits Times on May 26, 2017, with the headline 'Better economic outlook nudges STI up'. Print Edition | Subscribe