Bulls And Bears

Singapore shares end higher on strong China data

Investor sentiment picks up after weak start, with three banking stocks pushing up STI

After a weak start, local shares ended the day slightly higher, despite investors growing a little cautious yesterday.

Positive Chinese data helped the benchmark Straits Times Index (STI) add 2.66 points or 0.08 per cent to 3,423.91 after a weak start right from opening bell.

Turnover came in at 2.5 billion shares traded worth $1.5 billion, with losers beating gainers 288 to 158.

Throughout the day, the index struggled to climb, weighed down by the Jardine group of companies, which clocked combined losses of over 11 index points.

Despite this, the three banking stocks - DBS, OCBC and UOB - helped push the index up 16 points. DBS led the trio, surging 54 cents to $24.30. UOB jumped 17 cents to $25.38 and OCBC rose eight cents to $11.84.

Investor sentiment picked up after data showed that China's producer prices came in surprisingly strong last month, while consumer inflation picked up pace. Analysts said all signs point to a robust economy, although they expect further price pressure as the Chinese government's crackdown on smog hurts factory output.

In the telco sector, Singtel closed down two cents to $3.76 on a volume of 29.5 million, while StarHub rose 10 cents to $2.83 with 15.6 million units changing hands.

UOB Kay Hian analyst Jonathan Koh has a "buy" call on Singtel as the telco reported underlying net profit of $929 million for the second quarter "in line with our forecast of $923 million".

"The results included exceptional gain of $1,960 million (previous estimate: $1,895 million) from the divestment of 75 per cent stake of NetLink NBN Trust," he added.

Palm oil producer Golden Agri-Resources, whose results are expected next week, ended the day up 1.5 cents at $0.405 on a volume of 47.8 million.

Another actively traded stock was Best World International, which lost 15.5 cents to $1.26 on a volume of 19.3 million. Maybank Kim Eng had maintained its "buy" call with a target price of $1.88, citing the promise of strong Chinese sales that more than offsets the firm's weaker business in Taiwan. The broker added that Indonesia is likely to be the next growth market.

Keppel-KBS US Reit made its trading debut. It opened at 89.5 US cents, higher than the initial public offering price of 88 US cents. The counter ended the day unchanged.

Markets were mixed across the region, with Tokyo's benchmark Nikkei, Seoul's Kospi and New Zealand shares ending lower.

On the other hand, Hong Kong's Hang Seng hit another decade-peak, while Australian shares moved up for a third straight session to their highest in nearly 10 years.

China's trade growth slowed in line with consensus forecast last month, said Mr Rob Carnell, ING's head of research for Asia. A slowdown in shipments of coal and steel products led the overall export growth lower, he said, caused by over-capacity reduction in the coal and steel sectors.

Correction note: In an earlier version of the story, we said that DBS's counter rose 24 cents instead of 54 cents. This has been corrected. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on November 10, 2017, with the headline 'S'pore shares end higher on strong China data'. Subscribe