Bulls And Bears

STI edges up amid cautious atmosphere

Quiet trade front, US holiday on Monday leave investors with little guidance

The absence of trade issues for a change and a holiday in the United States on Monday left investors here with little to go on yesterday.

The lack of direction stranded the Straits Times Index (STI) in the slow lane for much of the day before it ended at 3,090.63, up 7.67 points, or 0.25 per cent.

Other key markets were mixed. China joined Singapore in the black, but Australia, Hong Kong, Malaysia and South Korea all fell while Japan was flat. The cautious atmosphere was no surprise, given that China on Monday lodged a complaint with the World Trade Organisation against the US over import duties, claiming that Washington's latest actions on tariffs breached the consensus the two reached at the Group of 20 summit in Osaka in June.

Beijing and Washington are also finding it tough to see eye to eye on an elementary undertaking like agreeing to a schedule for talks.

Trading volume here clocked in at 1.02 billion shares worth just $647.63 million, with losers outpacing gainers 192 to 169.

IG market strategist Pan Jingyi said the defensive utilities sector fared better than the rest, adding: "The sense of caution could be seen seeping in (during) the afternoon, with the STI paring some gains ahead of the US open, expecting a softer return for Wall Street following the Labour Day hiatus."

Yangzijiang Shipbuilding, unchanged at 90.5 cents, remained the most active counter on the STI, with 25.7 million shares done.

DBS was unmoved at $24.35, OCBC Bank gained 0.2 per cent to $10.65, and United Overseas Bank dipped 0.3 per cent to $24.93.

Sembcorp Marine continued to advance, closing up 1.7 per cent at $1.18 after it won contracts worth $400 million on Monday. Its parent, Sembcorp Industries, gained 2.9 per cent to $2.10. The new contracts bring the value of deals won in the 2019 financial year to $575 million, exceeding CGS-CIMB's full-year expectation of $500 million.

CGS-CIMB analyst Lim Siew Khee said SembMarine's "20 per cent plunge over the past three months has priced in the losses it guided for 2019".

Among second-line stocks, CSE Global added 3.4 per cent to 45.5 cents after it acquired industrial power systems manufacturer Volta for US$25.1 million (S$35 million).

The acquisition did not come as a surprise to CGS-CIMB analyst Cezzane See as CSE "is continuously looking out for value accretive and strategic buys to grow". The deal is positive as it expands CSE's depth in the onshore oil and gas market, and deal valuations were fair, she wrote.

A version of this article appeared in the print edition of The Straits Times on September 04, 2019, with the headline 'STI edges up amid cautious atmosphere'. Print Edition | Subscribe