Bulls And Bears

Bullish expectations push S'pore shares up

STI ends week higher as outlook on interest rates next year set to encourage investors

The Singapore market took its cue from Wall Street's overnight rally and finished higher yesterday, lifting local shares to an overall gain for the week.

The benchmark Straits Times Index (STI) rose 10.89 points or 0.38 per cent to close at 2,856.95, leaving it up 29.5 points or 1 per cent since Monday.

"There's a very bullish case for equities considering that the (US Federal Reserve) is now expecting only two rate hikes in 2017," Mr James Woods, a strategist at Rivkin Securities in Sydney, told Bloomberg.

But he noted: "There are uncertainties that could shake up some volatility in the market, including the US elections in November."

Other Asian bourses ended mostly lower. Tokyo, which reopened for trade after a public holiday on Thursday, slipped 0.3 per cent as a stronger yen dampened the joy that had greeted the Bank of Japan's monetary easing earlier in the week.

Hong Kong and Shanghai fell 0.3 per cent but Sydney gained 1.1 per cent and Seoul added 0.2 per cent.

One blue chip that did not fare so well here yesterday was developer City Developments, which fell three cents to $8.93.

Maybank Kim Eng Research reiterated its "hold" call on the stock after analysts visited the developer's Gramercy Park project in Grange Road. While the project is competitively priced on a per-square-foot basis, Maybank Kim Eng analyst Derrick Heng said the units are unlikely to sell fast, given their large absolute price tags. "We retain our cautious view on CityDev and property developers," he said.

Other blue-chip developers ended higher. CapitaLand gained three cents to $3.16, Keppel Corp added a cent to $5.26 and Hong Kong Land climbed 15 US cents to US$7.15.

Banking shares fell amid concerns that as interest rates stay low for longer, their profit margins will be affected. DBS dropped two cents to $15.22, OCBC slipped two cents to $8.55 and United Overseas Bank lost a cent to $18.85.

Thai Beverage was flat at 96 cents. Reports have said the firm is joining hands with several major foreign brewers to buy a stake in Vietnam's largest brewer Sabeco, a deal that could be worth at least US$1.8 billion (S$2.4 billion).

OCBC Investment Research maintained its "hold" call on the stock, but said investors who want to invest in Thai Beverage for the long term could accumulate shares in the brewer now.

Lum Chang gained half a cent to 36.5 cents. Columba Holdings, a subsidiary of a joint venture between Lum Chang and Lao V Serangoon, sealed a deal to acquire property-investment firm Corwin Holding for around $189.75 million.

A version of this article appeared in the print edition of The Straits Times on September 24, 2016, with the headline 'Bullish expectations push S'pore shares up'. Print Edition | Subscribe