Bulls And Bears

STI continues climb but uncertainty remains

Strategist sees no clear drivers for sustained rally, cites risk from strong greenback

SGX Centre 1 at Shenton Way Road in the Raffles Place District.
SGX Centre 1 at Shenton Way Road in the Raffles Place District.PHOTO: ST FILE

Singapore equities remained resilient yesterday despite losses in the United States.

The benchmark Straits Times Index (STI) rose 24.48 points or 0.82 per cent to 3,006.02. Some 1.88 billion shares worth $1.26 billion exchanged hands across the bourse.

Hong Kong rose 0.83 per cent as traders were cheered by data that showed Chinese producer prices last month rose at their fastest pace in more than five years. But Shanghai slipped 0.3 per cent.

Elsewhere in Asia, Tokyo fell 0.79 per cent as trading resumed after a holiday, and Seoul pared 0.18 per cent. Sydney lost 0.8 per cent and Kuala Lumpur added 0.25 per cent.

Wall Street slid 0.38 per cent on Monday, dragged down by a drop in crude oil prices, despite an optimistic start to the year.

"Reality is just starting to sink in," said Mr Kelvin Wong, chief technical strategist for Asia at City Index, referring to the potential repercussions of growing anti-globalisation sentiment worldwide as well as the inauguration of Mr Donald Trump as US president on Jan 20.

"The STI's performance was likely driven by positive play in Hong Kong, but uncertainties remain," he noted. "There are still no clear drivers for the rally to be sustained, and there is a big risk that global equity markets will soon start to price in strength of the US dollar, which will hurt Asian markets."

Of the 30 STI constituents, 24 finished stronger, while five clocked losses and one was unchanged.

Global Logistic Properties rose for the fourth consecutive session, jumping eight cents or 3.2 per cent to $2.55. The warehouse developer last Friday said it was in talks over a possible buyout - a deal which could rank as one of the biggest acquisitions in the Asia-Pacific.

Property giant CapitaLand was up five cents or 1.6 per cent to $3.14, after announcing in the morning that its wholly-owned shopping mall business, CapitaLand Mall Asia, had inked its second management contract within a span of five months.

Meanwhile, stocks in the oil and gas sector retreated amid knee-jerk selling from the overnight decline in oil prices. Ezra Holdings eased 0.1 cent or 1.9 per cent to 5.2 cents and Ezion Holdings sank one cent or 2.3 per cent to 42.5 cents.

This comes amid doubts that major oil producers will stick to their commitment to cut output.

Still, BMI Research said in a report that it has upgraded its oil price forecast for 2017 from US$55 per barrel to US$57 "on the grounds of greater conviction in Opec members complying with their allocated quotas under the agreed Opec, non-Opec production cut".

Natural Cool Holdings requested a trading halt before market opening, pending an announcement. It last closed at 12.3 cents.

The day's most active counter was Noble Group, which slid 0.4 cent or 2.2 per cent to 17.7 cents on 114.1 million shares done.

A version of this article appeared in the print edition of The Straits Times on January 11, 2017, with the headline 'STI continues climb but uncertainty remains'. Print Edition | Subscribe