Bulls And Bears

STI climbs back above 3,500 points

Banks, property, manufacturing and industrial stocks all contribute to gains

Local shares easily regained their 3,500-point perch yesterday, less than three weeks after dropping below that level in a nerve-racking correction.

The buoyant mood sent the benchmark Straits Times Index up 39.7 points, or 1.14 per cent, to 3,516.23 with banks, property, industrial and manufacturing stocks all contributing to the gains.

UOB Kay Hian Research said on Monday that the banks have forecast high single-digit loan growth. Net interest margins are expected to go up. It has a target price of $14.90 on OCBC and $30.40 on DBS.

"OCBC is our preferred 'buy' due to the initial public offering of Great Eastern (Malaysia) in the (second half of this year). However, DBS could provide more short-term momentum in the run-up to the next Fed meeting on March 20 to 21."

For now, instead of testing the bottom as people expected after the crash, stocks are climbing again to test the top.

Bond markets are jittery, though. In Treasury auctions this week, short-term yields continued to climb to levels not seen since the global financial crisis.

In the smaller companies space, China steel manufacturer Delong Holdings soared 77 cents, or 20 per cent, to $4.63 after saying on Tuesday night that it is expected to report a significant increase in net profit for last year.

Textbooks and consumer products reseller Y Ventures, backed by a fund linked to Osim founder Ron Sim, drew a Singapore Exchange query after prices leapt higher on high volumes this week.

Y Ventures has tripled in the space of two months, including the 7.3 per cent increase yesterday to 73 cents. At its current $150 million valuation, Y Ventures is trading at 87 times its 2017 expected earnings of US$1.3 million (S$1.7 million). Forecasts come from a PhillipCapital report at the end of last month.

Speculators are probably banking on the collaborations that might result from the Ron Sim link. At the current price, earnings should be doubling over the next year, at the very least.

Engineering and power plant play ISDN Holdings jumped 9.3 per cent to 23.5 cents. UOB Kay Hian Research noted on Tuesday how its key customers AEM and MIT are performing well.

Catalist-listed construction and property play Boldtek Holdings, the former Logistics Holdings, also stood out. It rose to as high as 24 cents before closing at 20.5 cents, down a cent. It said when it released results last week that higher public construction demand - anticipated this year - bodes well for the group.

A version of this article appeared in the print edition of The Straits Times on February 22, 2018, with the headline 'STI climbs back above 3,500 points'. Subscribe