Bulls And Bears

Optimism over trade talks lifts Asian markets

STI up 0.7%, with Brexit saga having little sway on regional bourses

Positive remarks on trade matters from both the United States and China raised hopes of a deal, making for a positive Tuesday for Asian equities.

The Straits Times Index (STI) built on a positive start to the week, opening 1.1 per cent higher before profit-taking saw it end at 3,160.67, a gain of 21.52 points or 0.69 per cent.

Among other Asia-Pacific indices, Australia, China, Hong Kong, Japan, Malaysia and South Korea all posted gains.

AxiTrader market strategist Stephen Innes said: "The familiar themes continue dotting the landscape, with renewed optimism again on the US-China trade talks, and head bashing continuing about the latest clownishness on the never-ending saga called Brexit."

Brexit had little sway on regional markets, with investors focused on US-China developments that as yet could be impeded by thorny issues, such as the passing of the Hong Kong Bill by the US Senate.

In Singapore, trading volume stood at 1.02 billion securities, 85 per cent of the daily average in the first nine months of this year. Meanwhile, total turnover reached $1.14 billion, 6 per cent over the January-September daily average. Across the market, advancers pipped decliners 185 to 184.

The spotlight was on Keppel Corp after Singapore investment firm Temasek made a partial offer on Monday to acquire a further 30.55 per cent stake in the conglomerate. It was the STI's most active counter yesterday, soaring 14.4 per cent to $6.68 on 33.5 million shares traded.

The local banks mostly ended higher. DBS Group Holdings closed up 0.5 per cent to $24.91, OCBC Bank finished 0.4 per cent higher at $10.71 while United Overseas Bank ended at $25.89, down 0.2 per cent.

Jefferies Singapore analyst Krishna Guha wrote in an earnings outlook on the Singapore banking trio that third-quarter results, to be released next month, are likely to confirm a pick-up in business volumes and a softening of margins. It will also reveal if the strength in non-interest income driven by trading and wealth management gains can outweigh any weakness in regional asset quality.

Among real estate investment trusts (Reits), CapitaLand Mall Trust units dipped 1.1 per cent to $2.62 after reporting third-quarter earnings that met street expectations with contributions from Westgate and Funan.

UOB Kay Hian upgraded its call on the retail Reit to "buy" with a target price of $2.88, with the brokerage welcoming its defensively positioned portfolio in the current uncertain macroeconomic landscape.

A version of this article appeared in the print edition of The Straits Times on October 23, 2019, with the headline 'Optimism over trade talks lifts Asian markets'. Print Edition | Subscribe