STI gains 0.2% as Reits climb after Fed chief signals September rate cut

SINGAPORE – Stocks in Singapore ended higher on Aug 26, after Federal Reserve chairman Jerome Powell’s Jackson Hole comments indicated that the US central bank is ready to cut rates in September.

The benchmark Straits Times Index (STI) rose 0.2 per cent or 8.04 points to 3,396.03. In the broader market, gainers beat losers 350 to 230, with 1.2 billion securities worth $1.2 billion changing hands.

Real estate investment trusts (Reits) were on a tear on Aug 26. The largest gainer among the seven on the STI was Mapletree Pan Asia Commercial Trust, which rose 3 per cent, or four cents, to $1.36. It was followed by Mapletree Logistics Trust, which climbed 2.3 per cent, or three cents, to $1.36.

Singapore Exchange market strategist Geoff Howie said the moves by the STI Reits were “measured” as the gains were aligned with each Reit’s sensitivity to rate developments over the past six months.

“Frasers Centrepoint Trust, which has been the least sensitive to recent rate speculation of the seven STI Reits, saw the least gains of the seven today at 0.4 per cent,” he said. Most other STI Reits gained between 1 per cent and 2 per cent.

As per Mr Powell’s speech, Mr Howie added: “Further rate cuts post-September will be data-dependent, thus the renewed optimism remains cautious.”

On the index, the top gainer was property developer Hongkong Land, which rose 4.5 per cent or 16 US cents to US$3.71. Yangzijiang Shipbuilding was the top loser, shedding 2.4 per cent or six cents to $2.46.

Of the three local banks, UOB rose 0.6 per cent or 18 cents to $30.96, OCBC Bank climbed 0.3 per cent or five cents to $14.43 while DBS Bank ended at $35.81, down 0.2 per cent or eight cents.

Across the region, Hong Kong’s Hang Seng Index ended up 1.1 per cent and Malaysia’s Kuala Lumpur Composite Index added 0.2 per cent. Japan’s Nikkei 225 was down 0.7 per cent and South Korea’s Kospi index slipped 0.1 per cent.

THE BUSINESS TIMES