Bulls And Bears

Region mostly positive ahead of trade deal inking

Singapore muted while several Asian bourses post comfortable gains

Asian markets had a calm start to the week ahead of tomorrow's signing of the US-China "phase one" trade deal in Washington - although some market participants were offloading positions ahead of the US corporate earnings season.

"Overall, risk sentiment looks positive on the back of optimism over an improvement in the economic relationship between the US and China," AxiTrader chief Asia market strategist Stephen Innes said.

In Singapore, the Straits Times Index (STI) spent yesterday trading in range and hovering around last Friday's close of 3,255.95. It eventually settled at 3,251.07, a dip of 4.88 points or 0.15 per cent.

The local benchmark's performance paled in comparison with other markets in the Asia-Pacific such as China, Hong Kong, South Korea and Taiwan, all of which posted comfortable gains.

Taiwan's Taiex advanced 88.77 points or 0.7 per cent to 12,113.42 after a landslide election victory for President Tsai Ing-wen and the Democratic Progressive Party.

Like the STI, blue-chip indexes in Australia and Malaysia ended lower. Japanese markets were closed yesterday. In Singapore, trading volume was 1.36 billion securities, 15 per cent over the 2019 daily average. Total turnover came in at $977.26 million, 92 per cent of last year's daily average, suggesting heavy penny activity.

Advancers outpaced decliners 217 to 176. Seventeen of the local benchmark's 30 counters ended in the red.

Among STI counters, Singtel, which fell 1.5 per cent to $3.27, continued to be weighed down by news of plans by associate Bharti Airtel to raise up to US$3 billion (S$4 billion) through equity and debt. Since the announcement last Thursday, Singtel shares have lost 3.5 per cent.

ST Engineering shares closed 0.7 per cent lower at $4.03. While recent price action suggests its shares are on the downtrend, RHB Securities head of Singapore research Shekhar Jaiswal expects ST Engineering to outperform the STI this year due to contributions from recent acquisitions and a record-high order book.

Creative Technology shares added 1.2 per cent to $3.40 after snagging six awards following the launch of new additions to its suite of Super X-Fi products at last week's CES show.

Investors will be scrutinising this week's bank earnings that kickstart the United States corporate earnings season for the September-December 2019 quarter, IG market strategist Pan Jingyi said, with lower interest rates expected to offset higher trading revenue.

A version of this article appeared in the print edition of The Straits Times on January 14, 2020, with the headline 'Region mostly positive ahead of trade deal inking'. Subscribe