Bulls And Bears

STI bounces back to pre-correction levels

DBS leads the charge after posting bumper first-quarter net profit of $1.52b

Traders seemed keen to get in some action ahead of the Labour Day break, and were in good spirits as earnings seasons and annual general meetings started to bear fruit.

The Straits Times Index was back above 3,600 points - a position it has not held since the correction early in the year. It gained 36.72 points, or 1.03 per cent, to 3,613.93.

Gainers beat losers 252 to 162, with 2.18 billion shares worth $1.62 billion changing hands.

DBS led the upward charge for benchmark stocks, adding 84 cents to $30.84 after posting a bumper first-quarter net profit of $1.52 billion. The local lender has now closed above $30 for the first time.

United Overseas Bank, which announces results on Thursday, was no slouch either. It closed up 70 cents to $30.14, while OCBC Bank added 15 cents to $13.80.

Yangzijiang Shipbuilding rose one cent to $1.17.

DBS analyst Ho Pei Hwa, who reiterated a "buy" call, said its price is a "good entry point", adding: "We have been more bullish on sector recovery and believe Yangzijiang deserves to re-rate, catalysed by order wins and newbuild price increases eventually."

But OCBC analyst Low Pei Han stuck to a "hold", lowering her fair-value estimate from $1.34 to $1.22. "We expect a drop in shipbuilding margins in (the second half) as less profitable vessels are delivered."

Venture Corporation continued to fall, losing 45 cents to $20.95. It is now 27.3 per cent down from its $28.82 close on April 19.

Off-index tech stocks fared better. Electronics components distributor Serial System rose 0.2 cent to 16.9 cents after first-quarter earnings almost doubled. Shareholders have backed spinning off a unit for a potential Hong Kong listing.

Meanwhile, Valuetronics, which has plunged by 25 per cent in the last two sessions, regained 10.5 cents, or 15.44 per cent, to 78.5 cents on a churn of 17.85 million shares.

RHB analysts Jarick Seet and Lee Cai Ling have said "the recent correction presents a good buying opportunity" after a bout of "overdone" selling. They held to a "buy" call "as we believe its fundamentals and growth drivers remain intact".

The former Rowsley was heavily traded on its first day as Thomson Medical, with a turnover 42.82 million shares. It shed 0.3 cent, or 3.09 per cent, to 9.4 cents.

Tycoon Peter Lim last year cemented his control over the erstwhile Rowsley, injecting his privately held Thomson Medical healthcare businesses into what was then a real estate and hospitality group.

A version of this article appeared in the print edition of The Straits Times on May 01, 2018, with the headline 'STI bounces back to pre-correction levels'. Print Edition | Subscribe