Bulls And Bears

Local shares get boost from Wall Street rally

STI ends week higher, lifted also by smooth transfer of power in Malaysia

A Wall Street rally overnight was just the spur local shares needed to end the week on a positive note.

The improved mood among traders here pushed the Straits Times Index up 32.58 points, or 0.92 per cent, to 3,570.17, and 25 points or 0.7 per cent ahead for the week. About 1.9 billion shares worth $1.4 billion were traded, with gainers beating losers 243 to 143.

An analyst also attributed the gains to the smooth transfer of power following an unexpected polls outcome in Malaysia.

The rises in United States markets, following softer-than-expected inflation data last month, also drove other key Asian indices higher, including Japan, Hong Kong, South Korea and Taiwan.

Inflation numbers and last week's US wage growth data indicate that the Federal Reserve will stick to its interest rate policy.

"While the soft CPI (consumer price index) figures are unlikely to derail the Federal Reserve from raising interest rates in June, the numbers are not encouraging enough to suspect that US interest rates will be raised more than expectations this year," said FXTM research analyst Lukman Otunuga.

An upbeat report by Maybank Kim Eng Research said the preliminary trends of the results season here suggest year-on-year aggregate core profit growth in the low teens - levels seen only once since 2016.

Genting Singapore was a notable star performer yesterday, up 12 cents, or 10.3 per cent, to $1.28. It was the day's most active counter with 124 million shares done. The chips are up for the casino giant after its first-quarter results beat expectations, led by a surge in rolling volume and favourable VIP holds.

Given its sturdy start to the year, RHB Research deemed the stock's recent weakness as unjustified and foresees a re-rating ahead on the back of further growth potential.

The battle over India's second-largest hospital chain, Fortis Healthcare, may be pretty much over, with the board picking the bids by Munjal-Burman - two prominent Indian families.

IHH managing director and chief executive Tan See Leng said: "We are disappointed by the decision... we believe we submitted the most compelling bid."

IHH shares closed unchanged at $2.03.

Wilmar International fell five cents to $3.16. The agri-business giant reported disappointing first-quarter results on Thursday night, led by weaker-than-expected margin in the oilseed and grain business and losses in the sugar division.

A version of this article appeared in the print edition of The Straits Times on May 12, 2018, with the headline 'Local shares get boost from Wall Street rally '. Print Edition | Subscribe