STI edges up on gains in key property stocks

Amid mixed sentiment across the region and a sombre kick-off to the second-quarter reporting season in the United States, the local market benchmark Straits Times Index (STI) ended yesterday at 2,648.90, up 28.71 points, or 1.1 per cent.

Only four of the STI's 30 component stocks were down for the day.

Among the key gainers were the leading property counters - UOL Group, City Developments (CDL) and CapitaLand, which ended the day up 2.96 per cent, 2.66 per cent and 2.11 per cent, respectively.

While the ongoing Covid-19 pandemic does not bode well for residential property sales, hotel occupancy rates or commercial rents, these stocks are widely seen by analysts to still offer decent value for long-term investors.

In fact, OCBC Bank Investment Research said yesterday that it is maintaining its recommendation to buy shares in CDL, which recently warned that its first-half pre-tax profit would be substantially lower than last year's.

The research house sees "deep value" in the stock, even though it has cut its fair value for the counter to $10.74 from $12.01 previously.

Sentiment was not all that positive across the broader market though, with advancers outnumbering decliners by only 251 to 226.

Many healthcare and pharmaceutical plays that have seen heavy trading recently ended the day lower.

Among them were iX Biopharma and Hyphens Pharma International, which ended the day down 9.52 per cent and 12.5 per cent, respectively.

Around the region, the Shanghai Composite Index was down 1.56 per cent, while the Hong Kong's Hang Seng Index ended the day 0.01 per cent higher. South Korea's Kospi Index was 0.84 per cent higher.

Closer to home, the key market benchmarks for Kuala Lumpur and Jakarta were down 0.82 per cent and 0.07 per cent, respectively, while Bangkok's main barometer was up 0.99 per cent.

In the US, the S&P 500 Index charted an overnight gain of 1.34 per cent.

However, while the reaction to the earnings reports of major US banks such as JP Morgan and Wells Fargo was mixed, their managements warned of a tough operating outlook ahead.

Schroders chief investment officer and global head of multi-asset investment Johanna Kyrklund said in a research note: "As we head towards the autumn, complacent investors may get a wake-up call.

"The furloughing of staff may be masking some of the negative effects of the lockdown, and as furlough measures are removed, job losses are likely to accelerate."