STI inches up on optimism over OCBC

Better-than-expected earnings from DBS and UOB prompt investors to pile into OCBC

Singapore shares closed a touch higher yesterday as bullishness over OCBC Bank ahead of its earnings results next week offset losses from energy plays following a sharp drop in oil prices.

The key Straits Times Index finished 1.11 points, or 0.03 per cent, higher at 3,229.73, ending the week up 1.7 per cent.

Better-than-expected earnings from DBS Group and United Overseas Bank in recent days prompted investors to pile into OCBC, sending its shares up six cents, or 0.6 per cent, to $10.22 yesterday ahead of its first-quarter results next Tuesday.

The focus was also on the United States jobs report due at 8.30pm yesterday (Singapore time) and the second round of the French presidential election tomorrow.

"A Macron win is expected, while a Le Pen win will send some shock waves through the financial markets," a trader said.

Singtel helped offset market weakness, rising two cents, or 0.5 per cent, to $3.75 ahead of its results on May 18. Other blue chips rose as well: Thai Beverage gained one cent, or 1.1 per cent, to 91 cents; ST Engineering was up five cents, or 1.3 per cent, to $3.85; and Hongkong Land rose four US cents, or 0.5 per cent, to US$7.72.

Earlier in the session, energy plays bore the brunt of a sell-off after oil tumbled to below US$47 a barrel, as big producers appeared to rule out further cuts in output.

Keppel Corp fell seven cents, or 1.1 per cent, to $6.56; Sembcorp Marine lost five cents, or 2.8 per cent, to $1.74; KrisEnergy dipped 0.1 cent, or 0.6 per cent, to 15.9 cents; and Mermaid Maritime eased 0.7 cent, or 3.6 per cent, to 18.6 cents.

PACC Offshore Services Holdings (Posh) fell 0.5 cent, or 1.5 per cent, to 32.5 cents despite a buy call from DBS Group Research, citing a continued pickup in offshore activity.

"Posh's share price was subject to a recent sell-off... a function of profit-taking, (lower) oil prices, as well as continued news of distress cases, for example, Marco Polo Marine's suspension of trading," it said. "But we think the fundamental drivers of a recovery remain intact."

A further pullback in DBS Group and City Developments (CDL) also took a toll. DBS fell three cents, or 0.1 per cent, to $20.42, extending losses since Thursday when it went ex-dividend, while CDL shed 14 cents, or 1.3 per cent, to $10.69. CapitaLand shed two cents, or 0.5 per cent, to $3.62.

The most actively traded counters included MDR, which jumped 0.1 cent, or 16.7 per cent, to 0.7 cent, with 1.63 billion shares traded. Addvalue Technologies also rose 0.9 cent, or 16.7 per cent, to 6.3 cents, with 185.7 million shares on trade.

Moya Asia gained 0.2 cent, or 2.4 per cent, to 8.6 cents. ISR Capital was flat at one cent.

Hyflux eased 1.5 cents, or 2.6 per cent, to 56.5 cents after posting a weak first-quarter profit of $0.8 million due to losses at its Tuaspring plant. A broker kept its hold call in the light of the plant's pending sale.

A version of this article appeared in the print edition of The Straits Times on May 06, 2017, with the headline 'STI inches up on optimism over OCBC'. Print Edition | Subscribe