Bulls And Bears

STI ends higher on surprise exports surge

Gainers include GLP, alumina and coal trader Sincap and the local banks, led by DBS Group

The benchmark Straits Times Index (STI) hit its highest level in almost two years on the back of an unexpected surge in exports.

The STI closed 10.81 points higher at 3,298.24, a gain of 0.33 per cent. In all, 2.28 billion shares worth $1.32 billion changed hands across the bourse. Non-oil domestic exports surged 8.2 per cent year on year last month after a mediocre showing for two months.

Global Logistic Properties rose 0.6 per cent or two cents to $3.31, after a Chinese consortium offered $16 billion for the warehouse operator last week. The consortium's bid worked out to $3.38 a share, not including an upcoming dividend of six cents a share.

Share prices of alumina and coal trader Sincap jumped by 20 per cent, rising by half a cent to three cents. The company mainly deals in commodities in China, where coal prices have been heading steadily upward over the past weeks.

Local banks also gained ground. DBS Group Holdings, the market's biggest gainer, put on 34 cents or 1.6 per cent to close at $21.44; United Overseas Bank rose 15 cents or 0.63 per cent at $24; OCBC Bank closed four cents or 0.36 per cent higher at $11.09.

But the day's third-most traded stock by volume, telecommunications product provider Addvalue Technologies, saw its share price fall by 7.7 per cent or 0.4 cent to 4.8 cents. Beleaguered Noble Group was dealt another blow, with its share price slumping by 12 cents, or 17.9 per cent, to close at 55 cents.

Asian stocks gained from the soft domestic demand, weak inflation and a tight labour market in the US.

The US dollar sank to a new 10-month low last week, and doubts are growing as to whether the United States Federal Reserve will raise rates for the third time. A missed rate hike could send investors turning to Asia instead.

In Hong Kong, the Hang Seng rallied for the sixth straight day on the back of Wall Street's record close last week. It rose by 81.35 points, or 0.31 per cent, to 26,470.58. Japan is closed for a public holiday.

The region's bourses also got a boost from China's faster-than-expected second-quarter growth. The Chinese economy grew 6.9 per cent in the period ended June 30.

But that was not enough to save Chinese small caps from tumbling amid worry over the prospect of tighter regulations. The Shanghai Composite Index dropped by 1.43 per cent to 3,176.46 points, while the Shenzhen Composite Index fell by 4.28 per cent to 1,800.54.

At the weekend, China held a closed-door conference where President Xi Jinping called for stronger action to protect the financial system from risk. Shanghai-based fund manager Dai Ming told Bloomberg: "The conference shows regulations are unlikely to ease... So the market is worried (that) if IPOs increase, then demand and supply in the market will be imbalanced briefly."

A version of this article appeared in the print edition of The Straits Times on July 18, 2017, with the headline 'STI ends higher on surprise exports surge'. Print Edition | Subscribe