Bulls And Bears

Markets rebound on IMF's yuan inclusion

The move to include the yuan in elite basket of currencies is expected to trim its volatility

Markets across the region bounced back yesterday as traders cheered the International Monetary Fund's decision to include the Chinese yuan in its elite basket of currencies.

The move is widely expected to help reduce volatility in the currency.

Singapore stocks joined the rally, although the gain was modest with the benchmark Straits Times Index (STI) inching up 14.32 points, or 0.5 per cent, to 2,870.26.

Hong Kong led the regionwide rally with a 1.8 per cent jump, even as official Chinese data showed that manufacturing dropped to the lowest in three years.

"The PMI (Purchasing Managers' Index) was worse than expected, so this may prompt more stimulus," Mr Mikio Kumada, a Hong Kong- based strategist at LGT Capital Partners, told Bloomberg.

He added: "The seasonal pattern always favours equities towards the end of the year."

Tokyo rose 1.3 per cent, while Shanghai held steady, adding 0.3 per cent after two volatile sessions as the authorities launched regulatory probes on major brokerages.

Seoul gained 1.6 per cent, Sydney advanced 1.9 per cent and Jakarta jumped 2.5 per cent.

Wall Street dipped 0.4 per cent overnight, as investors readied themselves for the European Central Bank meeting tomorrow, which could spell further quantitative easing policies to stimulate the economy, and the November jobs report on Friday.

At home, commodity trader Noble Group was among the day's biggest winners, rising half a cent, or 1.2 per cent, on its fourth straight day of gains to 43 cents.

It was also the most active counter, with 50.9 million shares changing hands.

Logistic facilities provider Global Logistic Properties also performed well, chalking up a five cent, or 2.5 per cent, increase to $2.02.

The group announced last week that it had signed leases with three industry leaders in China - JD.com, Best Logistics and STO Express - for a total land area of 743,000 sq ft.

Property giants Hongkong Land Holdings and CapitaLand helped boost the STI as well.

Hongkong Land added six US cents, or 0.9 per cent, to US$7.05. CapitaLand rose 10 cents, or 3.3 per cent, to $3.12.

The performance of the local banks was mixed.

United Overseas Bank edged up six cents, or 0.3 per cent, to $19.45 and DBS Group Holdings climbed five cents, or 0.3 per cent, to $16.55. Meanwhile, OCBC Bank was unchanged at $8.67.

On the other side of the ledger, Golden Agri-Resources, the world's second-largest palm oil producer, led losses among the blue chips, sliding half a cent, or 1.4 per cent, to 35.5 cents.

Ground handling firm Sats dipped one cent, or 0.3 per cent, to $3.94.

There were 994 million units traded worth $1.02 billion yesterday.

A version of this article appeared in the print edition of The Straits Times on December 02, 2015, with the headline 'Markets rebound on IMF's yuan inclusion'. Subscribe