BullsAndBears

STI buoyed by Trump's 'one China' remarks

His statement that tax reforms are pending also pushes index up by 1.9% for the week

Remarks by United States President Donald Trump that tax reforms are pending and that the White House will respect the "One China" policy helped local shares enjoy a buoyant week.

The Straits Times Index closed up 0.66 per cent or 20.43 points to 3,100.39 yesterday and up a whopping 1.9 per cent for the week.

Yesterday's rise was led by Yangzijiang Shipbuilding, which gained 3.5 per cent or three cents to 88.5 cents, and Thai Beverage, up 2.3 per cent or two cents to 88.5 cents. Keppel Corp joined in as well, adding 1.6 per cent or 10 cents to $6.36.

Privatisation fever continued, with United Engineers jumping as much as 4.2 per cent to $2.96 at one point, before prompting a query from Singapore Exchange about unusual price movements.

Within minutes of the query, the mainboard-listed property group asked for a trading halt, "pending release of (an) announcement".

United closed up 2.8 per cent or eight cents to $2.91.

"The market has been anticipating a takeover bid for the company since its key shareholders, OCBC Bank and Great Eastern Holdings, signalled their intention to sell their stakes," a trader said.

Two other privatisation candidates - property developers Wheelock Properties and Wing Tai - also chalked up gains. Wheelock was up 3.1 per cent or 5.5 cents to $1.84, while Wing Tai rose 2.5 per cent or 4.5 cents to $1.855.

Global Logistic Properties (GLP), which has been the target of speculation about a possible bidding war, took a breather yesterday, dipping 0.7 per cent or two cents to $2.76.

OCBC Investment Research downgraded GLP to a hold call, noting: "We believe it could be judicious for long-time investors to take some profits off the table after a breathtaking 57 per cent rally since Nov 16."

DBS Group Research maintained a buy call on GLP. "Given ongoing corporate activity involving possible bidders, we believe that the near-term share price will continue to see support."

ComfortDelGro edged up 0.8 per cent or two cents to $2.51 ahead of its full-year results. Singtel climbed 0.8 per cent or three cents to $3.91 on trade of 39.2 million shares after a broker reiterated a buy call on the telco's long-term growth prospects.

OCBC Investment Research said it expects Singtel to benefit from the Committee on the Future Economy's recommendations to develop a digital economy.

"We also note that Singtel has begun preparation for the initial public offering of its fibre broadband network unit, NetLink Trust, which will see a significant increase in cash inflow that could be used for investment, or some returned to shareholders."

Sats dipped 0.2 per cent or one cent to $4.97 after OCBC maintained a hold call on the ground handler. "With airline margins under pressure due to intense competition, this will translate to pricing pressure."

A version of this article appeared in the print edition of The Straits Times on February 11, 2017, with the headline 'STI buoyed by Trump's 'one China' remarks'. Print Edition | Subscribe