Bulls And Bears

STI gets boost from US earnings reports

Banks gain as market starts upgrading banking sector ahead of Q2 results: Broker

News of strong earnings by US companies gave a fillip to the Straits Times Index (STI), which gained 34.18 points, or 1 per cent, to close at 3,326.83 yesterday. Gains by the local banks also helped.

Turnover totalled 1.59 billion units worth $1.31 billion, lower than the Singapore Exchange's securities daily average of 1.92 billion shares worth $1.36 billion as of June. Gainers outnumbered losers 219 to 178.

One broker noted that the market has started upgrading the banking sector, with better ROE (return on equity) numbers expected as the banks begin reporting their second-quarter results next week.

OCBC rose 3.2 per cent, or 36 cents, to $11.66, UOB gained 2.7 per cent, or 70 cents, to $26.89, while DBS advanced 1.2 per cent, or 31 cents, to $26.47.

The most actively traded counter by volume yesterday was Ezion, which rose 3.7 per cent, or 0.3 cent, to close at 8.4 cents. Some 79.3 million shares changed hands. RHB Securities noted that Ezion's share price was likely pressured by the selling of bond or debt holder conversion, and that yesterday's rebound might have come as investors saw 8 cents as a discounted price from the counter's conversion price of 27.6 cents as of June 13.

Meanwhile, mechanical and electrical engineering services firm DLF Holdings made its Catalist trading debut, opening at 22 cents apiece, down from its initial public offering placement price of 23 cents. It closed at 16.9 cents with 2.63 million shares traded.

Among the index stocks, one active counter was Genting Singapore, which gained 0.8 per cent, or one cent, to $1.29, with 39.6 million shares traded. This came on the back of news that Japan has liberalised its casino industry.

In a research report dated July 22, Maybank Kim Eng analysts noted that while many issues have yet to be finalised, Genting Singapore "stands a good chance to win a licence thanks to its responsible gaming experience and solid net cash position". Pundits estimate Japan's gross gaming revenue could be between US$6 billion (S$8.2 billion) and US$40 billion a year, the report said. The brokerage has initiated a "buy" call and a $1.46 target price.

Other Asian markets closed mixed. Tokyo stocks advanced, with investors encouraged by solid US corporate earnings. The Nikkei 225 rose 0.46 per cent to close at 22,614.25. In Hong Kong, the Hang Seng index, led by energy stocks, gained 0.9 per cent to 28,920.9. However, the benchmark Shanghai Composite edged down 0.07 per cent to 2,903.65, while the Kospi in Seoul fell 7.17 points to 2,273.03.

A version of this article appeared in the print edition of The Straits Times on July 26, 2018, with the headline 'STI gets boost from US earnings reports'. Subscribe