Singapore shares turned in a rousing performance in March to push the market value to the highest point this year.
The market capitalisation of the 765 firms listed here totalled $847.38 billion at close of trade yesterday, up 3.1 per cent from $821.87 billion as at Feb 29 and 5.3 per cent ahead of the $804.9 billion on Jan 31. This followed a 6.5 per cent rise by the benchmark Straits Times Index (STI) last month to 2,840.9 yesterday as the market continued its recovery from January's crash.
March's rally was helped in part by market expectations that the United States Federal Reserve would not hike interest rates at its meeting last month. Rates were held steady as hoped, and Fed chair Janet Yellen has since vowed to proceed with rate adjustments "cautiously".
CMC Markets analyst Margaret Yang said: "How long is this rebound going to last? No one can really give an answer at the moment; but one thing for sure is that Yellen's re-affirmed dovish stance gave the market sufficient comfort and room to breathe.
"The chance of an April rate hike has diminished, and whether or not a June hike will materialise has now become more questionable."
Only five of the 30 STI constituent stocks failed to end last month with a gain, while another seven put on more than 10 per cent through the month. City Developments led the pack, with its shares rising 14.9 per cent last month to $8.17, pushing the market cap to $7.43 billion, the 22nd highest here.
DBS Group Holdings was the second-biggest STI gainer in March, up 13.3 per cent to $15.38. This lifted its market cap to $38.68 billion, the fifth biggest on the exchange.
Its competitors OCBC Bank and United Overseas Bank were close behind. OCBC's market value was the sixth highest at $36.43 billion after its shares climbed by 9.5 per cent to $8.84 yesterday. UOB was the seventh most valuable at $30.56 billion as its shares rose 10 per cent to $18.87.
Insurance and investment firm Prudential continued to be the biggest by market cap in March at US$67.04 billion, even though its value dropped 4 per cent from end-February. Singtel came in second at $60.87 billion, after its shares closed up 2.4 per cent in March to $3.82.
Meanwhile, in the offshore and marine sector, Keppel Corp's market cap was $10.61 billion - the 17th biggest on the market - on the back of a 12.5 per cent share price gain to $5.83. Sembcorp Marine shares rose 7.8 per cent to $1.65, pushing the market cap to $3.45 billion, the 44th biggest. The duo benefited from some recovery in the crude oil benchmark Brent futures, which rose from US$36 per barrel a month ago to around US$39 now.
"Overall, the market performance in March gave a positive end to an otherwise weak first quarter," CIMB Private Banking economist Song Seng Wun said. "But will the second quarter stay strong? We don't know. It may well end up being as bumpy as the first, because the fear factors, particularly the slowdown in China, have not disappeared."
On Wednesday, the Asian Development Bank forecast that China's economy will grow only 6.5 per cent this year and 6.3 per cent next year, a more downbeat outlook than the Chinese official estimate of 6.5 to 7 per cent growth.