Bulls And Bears

S'pore market builds on positive start to week

Investors buoyed by hopes of more rate cuts and increased stimulus from govts

Local shares stayed in positive territory yesterday on hopes of more interest rate cuts and increased stimulus from governments, as well as easing trade tensions.

The Straits Times Index (STI) built on its positive start to the week to add 7.50 points, or 0.24 per cent, to 3,135.95.

Markets elsewhere were mixed. Australia, Japan, Malaysia and South Korea were higher, but China and Hong Kong fell as investors booked profits after shares rose on the back of interest rate reform by the Chinese central bank.

"Positive trade headlines and potential fiscal stimulus provided much-needed relief for investors who have been spooked by recessionary cheerleading and toppling bond yields," VM Markets managing partner Stephen Innes said.

Markets were also buoyed by further delays of the ban on US firms doing business with Huawei, which ING Asia economist Prakash Sakpal noted was positive for markets.

Bank of Singapore's head of investment strategy, Mr Eli Lee, said delaying the ban and some Chinese tariffs are "only near-term reprieves" while "longer-term concerns remain", as evidenced by a recent fall in bond yields and forward inflation expectations falling.

Trading volume here clocked in at 1.29 billion shares worth $958.86 million, with losers edging out gainers 192 to 183.

Yangzijiang Shipbuilding was the STI's most active for a fourth straight session, falling 4 per cent to 97 cents on 48.2 million shares traded. The shares remain volatile as bulls and bears and those looking for a quick flip tussled.

The banks slipped: DBS lost 0.2 per cent to $24.71, OCBC Bank dipped 0.2 per cent to $10.69, and United Overseas Bank eased 0.6 per cent to $24.99.

Property players fared well, with Hongkong Land adding 1.6 per cent to US$5.85 and CapitaLand advancing 2 per cent to $3.53.

Tensions in Hong Kong had sent Hongkong Land shares down, but judging from last week's activity, retail investors were net buyers, biting at the opportunity to accumulate the stock.

KGI Securities noted that at current prices, the company offers a good risk-to-reward trade-off along with Singapore Airlines, which closed flat at $8.92, and Sembcorp Industries, up 0.5 per cent to $2.25.

Energy plays Rex International fell 2.6 per cent to 7.6 cents, and GSS Energy closed flat at 7.4 cents.

RHB Research Institute has maintained its neutral call on GSS with a target price of 7.4 cents.

A version of this article appeared in the print edition of The Straits Times on August 21, 2019, with the headline 'S'pore market builds on positive start to week'. Print Edition | Subscribe