Bulls And Bears

STI lifted up by region-wide rally

Pedestrians using an escalator that runs past an electronic screen and ticker board that indicates stock figures at the Singapore Exchange (SGX) headquarters in Singapore.
Pedestrians using an escalator that runs past an electronic screen and ticker board that indicates stock figures at the Singapore Exchange (SGX) headquarters in Singapore. PHOTO: ST FILE

Regional markets defy drop on Wall Street, thanks in part to relative stability in oil prices

A region-wide rally gave local shares a leg up yesterday after more stability in oil prices helped calm nerves.

The Straits Times Index closed up 13.56 points or 0.48 per cent at 2,830.63, while 1.55 billion shares worth $799.5 million changed hands across the overall market.

All key markets across Asia rose, with Shanghai up 1.4 per cent and Hong Kong adding 1.55 per cent. Tokyo rose 0.38 per cent and Kuala Lumpur put on 0.84 per cent.

The regional markets defied the 0.29 per cent drop overnight on Wall Street, thanks in part to the relative stability of oil prices, with Brent crude futures staying close to US$52 a barrel after a recent build-up.

This came as the United States dollar - which has a reverse correlation with commodity prices - weakened slightly, to around 1.386 against the Singapore dollar by 8pm yesterday. But the oil supply fundamentals will remain a decisive factor.

"Oil prices started the week strong on comments by Russia's President Vladimir Putin that the country was prepared to join Opec in output cuts... The next potential upside catalyst for oil prices is likely the Opec meeting on Nov 29," DBS analysts said in a note on Monday, referring to the Organisation of the Petroleum Exporting Countries.

In the local market, 19 of the 30 STI constituents ended in the black. Hongkong Land Holdings led the gainers, adding 22 US cents or 3.29 per cent to US$6.91, while Golden Agri-Resources put on one cent or 2.74 per cent to 37.5 cents on 55.1 million traded shares.

Singapore Exchange, due to announce its results today, closed up two cents or 0.28 per cent at $7.23.

The bourse's total market turnover hit 100.49 billion shares in the three months to Sept 30, up from 98.61 billion shares in the previous quarter, but was down in value terms from $65.14 billion to $62.25 billion.

CapitaLand Commercial Trust, also due to announce its results today, ended flat at $1.555, while Ascendas Real Estate Investment Trust rose two cents or 0.83 per cent to $2.44, before its results announcement tomorrow.

City Developments was among the six blue-chip losers yesterday, closing down one cent or 0.11 per cent at $8.77.

CDL has recorded a total return of around 17 per cent this year, one of the highest in the property sector, which still commands a robust long-term outlook due to Singapore's strong governance framework and gateway-city status in the region, said Credit Suisse Singapore research head Gerald Wong recently.

But with Singapore's economic growth struggling and unemployment rate potentially rising, the domestic home market will likely remain subdued in the near term. Those with a diversified business - such as CDL and CapitaLand - will fare better.

Meanwhile, Noble Group was again the day's top active. It had 116.7 million shares traded, closing up 0.2 cent or 1.11 per cent at 18.2 cents.

Electronics company WE Holdings was another hot counter, rising 0.1 cent or 20 per cent to 0.6 cent on 109 million traded shares.

A version of this article appeared in the print edition of The Straits Times on October 19, 2016, with the headline 'STI lifted up by region-wide rally'. Print Edition | Subscribe