Bulls And Bears

STI edges up as investors stay on sidelines

Traders expect plans for output ceiling to be derailed by Iran's rejection at Opec meeting

Singapore shares finished slightly higher yesterday, with investors largely sidelined ahead of an Organisation of Petroleum Exporting Countries (Opec) meeting.

The Straits Times Index added 0.16 per cent or 4.55 points to close at 2,795.09. Much of the heavy lifting was done by Thai Beverage, which gained 2.8 per cent or 2.5 cents to 92.5 cents, with 47.6 million shares traded.

ThaiBev helped give a lift to the overall consumer staple sector to be the best performer last month, with a 3.5 per cent average market capitalisation weighted total return, according to SGX My Gateway.

The 20 biggest consumer stocks have averaged a 16.3 per cent year- to-date total return. Consumer staples were among the most actively traded stocks yesterday.

Other food and beverage firms in vogue included Sino Grandness Food Industry Group, which jumped 9.4 per cent or 6.5 cents to 76 cents on speculation that it is edging closer to an initial public offering of its Garden Fresh unit in Hong Kong.

Yeo Hiap Seng extended gains, putting on 7.5 cents or 5.1 per cent at $1.56 despite saying it could not explain the unusual price movement after the Singapore Exchange's query on Wednesday.

Oil-related counters Keppel Corp, Sembcorp Industries and Sembcorp Marine gained as oil prices held steady ahead of the Opec meeting. Keppel gained 0.2 per cent or one cent to $5.30, SembIndustries edged up 0.4 per cent or one cent to $2.78 and SembMarine rose 1.3 per cent or two cents to $1.555.

Many participants are expecting plans for an output ceiling - rumoured to have the conditional support of Saudi Arabia - to be derailed by Iran's rejection of the proposal.

Golden Agri-Resources rose 2.6 per cent or one cent to 39 cents, while Wilmar International grew 1.8 per cent or six cents to $3.39.

Bank counters held up after rating agency Fitch Ratings on Wednesday affirmed their ratings at AA- with a stable outlook. OCBC edged up 0.4 per cent or three cents to $8.60. United Overseas Bank was flat at $18.28, while DBS Group Holdings dipped 0.1 per cent or one cent to $15.49. Fitch said the trio had "strong funding profiles, which stem from their entrenched domestic franchises, healthy loss-absorption buffers, steady profitability and stringent regulatory oversight".

Singapore Airlines fell 1.2 per cent or 13 cents to $10.55, after HSBC Global Research maintained a hold call on the stock. It said the airline's lower fuel expenses may be offset by "weak yields" from a lacklustre macro environment, intense competition from Chinese, Middle Eastern and North Asian carriers and a lower fuel surcharge. SIA's new capacity "might not translate into satisfactory returns" as most of its aircraft will start servicing long-haul destinations such as the European Union and North America, where "margins are slim amid intense competition", HSBC added.

A version of this article appeared in the print edition of The Straits Times on June 03, 2016, with the headline 'STI edges up as investors stay on sidelines'. Print Edition | Subscribe