Bulls And Bears

Market continues to recover from sell-off

Cyclical counters and Reits among gainers; SGX and Singtel rebound strongly

Fresh off a rebound last week, regional markets were sprightly again yesterday, bumping the Straits Times Index up 44.37 points, or 1.3 per cent, to 3,487.88.

Cyclical counters like Venture Corp, Hi-P International, Sembcorp Marine and Yangzijiang Shipbuilding saw some of the biggest gains.

Real estate investment trusts (Reits) also rose on speculation, subsequently confirmed, that there will be tax parity between investing in individual Reits and investing in Reit exchange-traded funds (ETFs).

Previously, distributions by Singapore Reits to Reit ETFs out of specified income were subject to a higher corporate tax.

Singapore Exchange (SGX) rose 34 cents, or 4.6 per cent, to $7.71 after it said it would launch successor products to the Nifty family of derivative products before August.

It also said it would continue to work with the National Stock Exchange of India on a trading link to its International Exchange.

SGX shares slumped last week after the death knell was sounded for its popular Nifty 50 futures product. Indian stock exchanges had said they would stop providing data feeds to foreign rivals, and eventually halt the trading of offshore derivatives tied to India's benchmark indices such as the Nifty 50.

Reiterating its "buy" call and target price of $8.90, DBS Group Research said in a note yesterday: "SGX's stock price should still be supported by its stable and sustainable dividend yield of 4 per cent and its continued efforts to drive market liquidity and new product initiatives, which should bear fruit in the coming years, including the recently announced trading link with Bursa Malaysia."

India, too, is probably on the minds of Singtel investors. The telco led the rebound yesterday, rising 10 cents, or 3 per cent, to $3.43. Singtel had slid from $3.61 near end-January to a multi-year low of $3.33 last Thursday.

In the middle of last week, Singtel's embattled associate Bharti Airtel said it was planning to list its African unit, Bharti Airtel International (Netherlands). African operations, which contribute a quarter of Airtel's total revenues, have become profitable in recent quarters.

On the smaller companies front, speculation continued over the fortunes of offshore support vessel owner Marco Polo Marine.

The counter topped the actives list, alongside Mr Peter Lim's vehicle Rowsley and agriculture and property firm HLH Group.

Another standout was interior fit-out and panelling products provider Design Studio Group.

It sank 26 per cent to 40 cents. It had said last Thursday it would report a significant loss for its fourth-quarter results.

A version of this article appeared in the print edition of The Straits Times on February 20, 2018, with the headline 'Market continues to recover from sell-off'. Subscribe