Bulls And Bears

Regional stocks ride high on optimism

STI in the green for 3rd straight session; global players see benefits of a 'Goldilocks economy'

The optimism that has fuelled a global market rally since last Friday continued to send regional stocks higher yesterday.

Singapore's Straits Times Index (STI) climbed 8.83 points, or 0.3 per cent, to 2,910.65 - in the green for the third straight session.

Elsewhere, Tokyo rose 0.84 per cent, Hong Kong added 0.46 per cent, Shanghai put on 0.37 per cent and Sydney advanced 0.66 per cent.

Wall Street gained 0.66 per cent overnight to hit a fresh high, still charged up from an exceptional jobs report last month and hopes that central banks' stimulus efforts are sufficient for a post-Brexit world.

Traders are "basking in a risk-on mode", said trading strategist Nicholas Teo of KGI Fraser Securities. "Global markets continue to put the woes and fears of a Brexit fallout firmly in the rear-view mirror... many players are encouraged that we are beginning to enjoy the benefits of a 'Goldilocks economy' - one that is neither too hot nor too cold."

Still, a NetResearch Asia report said the buy momentum has waned slightly, possibly as traders pare positions ahead of the release of the Federal Reserve's Beige Book, which will provide details on the United States' regional economies.

Of the 30 STI constituents, 18 were gainers and seven were losers.

Palm-oil giant Golden Agri-Resources was among the day's biggest winners, jumping 1.5 cents or 4.3 per cent to 36 cents, while transport operator ComfortDelGro rose 10 cents or 3.5 per cent to $2.95.

Singapore Technologies Engineering (ST Engineering) grew five cents or 1.5 per cent to $3.37, after announcing on Tuesday that its aerospace arm, ST Aerospace, secured new contracts worth $700 million in the second quarter of this year.

CIMB Research analyst Lim Siew Khee said ST Engineering's order momentum is "commendable", compared with its peers in the industrial segment that are facing an order drought.

"Solid order momentum from aerospace and electronics could keep ST Engineering's order book steady at $11.5 billion by end-2016," noted Ms Lim, who maintains an "add" call on the stock but with a higher target price of $3.60.

Outside the blue chips, shipbuilder Vard Holdings was up 0.2 cent or 1.2 per cent to 17 cents. The group said on Tuesday that its unit Vard Electro has clinched a 100 million kroner (S$16 million) contract for the delivery of an engineering and electrical installation package for Britain's new polar research vessel.

OKP Holdings, whose unit Eng Lam Contractors won a $19.3 million contract by JTC for infrastructure works at Punggol, ended flat at 25 cents.

Noble Group's rights shares continued to be the most heavily traded counter, slumping 0.9 cent or 15.8 per cent to 4.8 cents on a volume of 374.5 million units. Some 1.88 billion shares worth $1.09 billion were traded across the bourse.

A version of this article appeared in the print edition of The Straits Times on July 14, 2016, with the headline 'Regional stocks ride high on optimism'. Print Edition | Subscribe