Singapore stocks end flat despite Asia rally; STI inches up 0.03%

SINGAPORE - Local stocks ended flat on Sept 8 while Asian markets rallied amid expectations that the Federal Reserve will cut interest rates in September, given a weak US jobs report.

The benchmark Straits Times Index (STI) inched up 0.03 per cent or 1.44 points to 4,308.52.

Across the broader market, gainers outnumbered losers 394 to 211, after two billion securities worth $1.3 billion changed hands.

Elsewhere in the region, key indexes ended largely higher.

Japan’s Nikkei 225 gained 1.5 per cent, South Korea’s Kospi Composite was up 0.5 per cent, the Hang Seng Index rose 0.9 per cent, while the FTSE Bursa Malaysia KLCI ended 0.5 per cent higher.

Data out on Sept 5 showed US non-farm payrolls were below expectations in August, while the unemployment rate rose in July, creating an “almost certain” expectation that the Fed will cut rates in September, noted Mr Glenn Thum, research manager at PhillipCapital.

Mr Thum expects banks will see further pressure on net interest margins from the lower interest rates, although this should be offset by loan growth and fee income.

Meanwhile, real estate investment trusts will continue to benefit from the slowing labour market and higher rate cut expectations, which would improve financing costs, he said.

“We continue to like DBS for its fixed dividend policy, which will reassure investors of a steady dividend per share despite profit volatility,” he said.

Yangzijiang Shipbuilding was the top gainer on the STI, rising 2.3 per cent or seven cents to $3.17.

Singtel saw the biggest decline, falling 1.4 per cent or six cents to $4.33.

The local banks were mixed – DBS Bank gained 0.1 per cent or four cents to $50.85, OCBC Bank fell 0.2 per cent or three cents to $16.82 and UOB lost 0.5 per cent or 19 cents to $35.65.

THE BUSINESS TIMES