Bulls And Bears

Local shares rebound but caution prevails

Analysts see 0.78% rise as a blip ahead of next week's central bank meetings in US and Japan

The local market snapped a four-day losing streak but analysts see the upswing as a mere blip ahead of the closely watched central bank meetings in the United States and Japan next week.

With North Asian markets in Greater China and South Korea shut for a holiday, Singapore investors had little regional distraction, allowing the Straits Times Index (STI) to close 21.93 points or 0.78 per cent higher at 2,827.45.

This followed a four-day, 3.07 per cent slump. The cautious mood was reflected in the somewhat subdued trading yesterday, with only $828.1 million worth of shares traded. For the week, the STI pared 1.6 per cent.

Overnight, Wall Street added 0.99 per cent, likely due to the weaker-than-expected August retail sales figures in the United States.

"I don't expect any big bet until Janet Yellen and Haruhiko Kuroda take the podium," said KGI Fraser Securities trading strategist Nicholas Teo, referring to the Federal Reserve chair and Bank of Japan governor presiding at the respective monetary policy meetings next week.

Still, the rebound saw 20 of the 30 STI component stocks end higher. Hongkong Land Holdings put on 13 US cents or 1.94 per cent to US$6.83, and City Developments rose 16 cents or 1.84 per cent to $8.86, both with just around 1.5 million traded shares.

Singtel was more active, gaining two cents or 0.51 per cent to $3.91 on 24.4 million transacted shares. StarHub also rose, up three cents or 0.87 per cent to $3.46. M1, which is outside the STI, rose two cents or 0.82 per cent to $2.46. After the extended sell-off since late last month amid talk of a fourth operator, the telco sector is now finding its bottom and may see inflows from investors seeking safety in dividend plays. The trio's dividend yield ranged from 4.5 per cent to 6.2 per cent.

Keppel Corp closed up four cents or 0.77 per cent at $5.22 while Sembcorp Marine ended flat at $1.25. Beginning next Monday, SembMarine will be out of the STI, replaced by Jardine Matheson Holdings - which dropped 55 US cents or 0.91 per cent to US$60.14 - in the index's quarterly review.

The top losing blue chip was Jardine Cycle & Carriage, down 60 cents or 1.43 per cent to $41.40. UOL Group closed down one cent or 0.18 per cent at $5.51, while Global Logistic Properties was off one cent or 0.54 per cent to $1.825.

Outside the STI, Rickmers Maritime continued its plunge, losing half a cent or 8.2 per cent to 5.6 cents, after announcing its inability to repay bonds due next March.

But not all companies in the marine and energy sector were shunned by investors.

PEC added one cent or 2.02 per cent to 50.5 cents, pushing its one-month gain to 23.17 per cent. The oil and gas engineering firm has been a market favourite despite the sector's woes, attracting investors with improved earnings in the three months to June 30.

A version of this article appeared in the print edition of The Straits Times on September 17, 2016, with the headline 'Local shares rebound but caution prevails'. Print Edition | Subscribe