Bulls And Bears

STI ends higher, bucking trend in Asia

Concerns over US Fed's interest rate policy weigh on investor sentiment across region

Local shares defied the regional trend to end higher yesterday despite investor misgivings over the United States' interest rate policy.

The benchmark Straits Times Index gained 15.37 points, or 0.49 per cent, to 3,137.57 while other major Asian markets sagged.

Minutes from the US Federal Reserve's latest meeting showed that the central bank is confident it can raise interest rates gradually, as it does not expect inflation to spike suddenly. This was taken by some market punters as a lack of clear guidance, which weighed on sentiment across the region.

Hong Kong shed 0.4 per cent, Shanghai slipped 0.3 per cent and Sydney fell 0.4 per cent, while Tokyo ended flat.

Mr Greg McKenna, the chief market strategist at AxiTrader, noted that there appears to be some scepticism over the likely effectiveness of US President Donald Trump's economic policies. He added that investors are increasingly expecting a market correction, after weeks of rallying in the wake of Mr Trump's election. "When folks are starting to think and talk like this, it tells me that there could be a subtle shift in market thinking. This is because the Trump rally has now exceeded most US equity market strategists' guesstimates of where US stocks would end 2017," he wrote.

Noble Group, which has been actively traded in recent days, was again a hot stock at home, rising 1.5 cents to 2.7 cents with 372 million shares traded.

Genting Singapore was another top active, gaining five cents to $1.03, with 79 million shares changing hands. Sembcorp Marine climbed 28 cents to $1.815, after it recorded a massive earnings turnaround in the fourth quarter.

The rig-builder posted a net profit of $34.3 million for the three months ending Dec 31 last year - a stark contrast to the net loss of $536.9 million in the same period a year earlier.

Chocolate confectioner Delfi added three cents to $2.35, also after reporting a big jump in profits. Earnings for the fourth quarter more than quadrupled to US$3.7 million (S$5.2 million).

Far East Hospitality Trust rose half a cent to 60 cents, after posting on Wednesday a fourth-quarter income available for distribution of $20.2 million, down 2.3 per cent from the same period a year ago.

CIMB Research analyst Yeo Zhi Bin said the results "reaffirm our view that the green shoots of recovery for the hospitality sub-sector will appear only in 2018", and maintained his "hold" call on the trust.

Ezion Holdings added 3.5 cents to 39.5 cents. It had reported a net loss of US$66.6 million for the fourth quarter, due to continuing weakness in the oil and gas sector.

Still, OCBC Investment Research analyst Low Pei Han maintained her "buy" call, saying its current low valuation "has largely priced in the negatives".

A version of this article appeared in the print edition of The Straits Times on February 24, 2017, with the headline 'STI ends higher, bucking trend in Asia'. Print Edition | Subscribe