Local market unscathed in June despite Brexit jitters

Some blue chips even see share price gains, lifting Singtel to top spot in market value

Singtel is now the largest listed company by market capitalisation here after a spate of active trading pushed up its share price over the past month.

The telco's shares saw a surge last month as the combined value of local stocks rose slightly after the market weathered Brexit jitters with relative resilience. Singtel was a standout among blue chips. Its market cap rose 6.7 per cent month on month to $65.81 billion last month, allowing it to overtake Prudential and secure the No.1 spot in market cap terms.

Singtel's share price also gained 6.7 per cent over the month to close at $4.13 yesterday. The counter rose a total of 12.5 per cent in the six months ended June 30.

"The bulk of the buying has been by foreign institutional funds, which were seen coming here to buy up defensive stocks with stable yields such as telecommunications and real estate investment trusts (Reits) as the Brexit saga unfolded," remisier Alvin Yong said.

This was reflected in StarHub's 7.4 per cent gain last month, which saw it close at $3.79 yesterday, and Ascendas Reit's 8.3 per cent rise to $2.48. StarHub was 24th in the market cap ranking, unchanged from a month ago, while Ascendas Reit climbed up one rung to 25.

The trio were outperformers on the Straits Times Index (STI) last month when the local market was bracing itself for last week's Brexit vote. A major rout followed the unexpected result, but Singapore was part of the global rally this week as capital returned for bargain-hunting. That left the STI up 1.8 per cent for last month.

Against this backdrop, the combined market cap was $848.28 billion as at June 30, up 0.3 per cent from $845.33 billion in May.

Prudential ended last month in second place on the market cap list as its worth dropped to $60.16 billion at yesterday's close, down 9.5 per cent from May 31, after its share price fell 7.4 per cent to US$17.50.

Jardine Matheson Holdings in third place saw its market cap remain unchanged at $55.96 billion, while its shares gained 2.3 per cent to US$58.31.

The three local banks kept the same positions - DBS was in fifth place with a market cap of $39.90 billion, OCBC in sixth with $36.44 billion and United Overseas Bank in seventh with $29.83 billion.

DBS shares rose 1.7 per cent last month to close at $15.76 yesterday, while OCBC gained 0.8 per cent to $8.69 and UOB closed up 1.1 per cent at $18.42.

The banks are considered well protected against European exposure, and UOB said yesterday that it would stop providing loans for London property. But credit quality issues would persist as the regional economy and loan growth slowed, Moody's warned in a recent report.

In the property sector, CapitaLand shares went up 2.7 per cent last month to $3.07 while its value rose to $13.12 billion. It moved up a spot to 13th place on the market cap list.

City Developments dropped a notch to 23rd, with its market cap slipping to $7.4 billion as its shares shed 0.6 per cent last month to reach $8.14.

After safely absorbing the impact of Brexit, the local market might continue to see sustained appetite in the coming month because of low valuations, Mr Yong said.

"But we still need to be careful. With the reporting season starting soon, you don't want to be caught by any downside surprise," he said.

A version of this article appeared in the print edition of The Straits Times on July 01, 2016, with the headline 'Local market unscathed in June despite Brexit jitters'. Print Edition | Subscribe