Bulls And Bears

STI pushed up by strong US jobs data

Deregulation of US financial industry and boost from investors also buoy local shares

Local shares took the cue from last Friday's Wall Street rally, ignited by unexpectedly strong United States jobs data and moves by President Donald Trump to deregulate the financial industry.

The Straits Times Index closed 0.49 per cent or 14.97 points higher at 3.056.91, led by Global Logistic Properties (GLP), City Developments (CDL), CapitaLand and banks DBS Group and OCBC.

GLP jumped by 4.6 per cent or 12 cents to $2.74, with 50.1 million shares traded after it said last week that it has received bids from various parties, including two of its top executives, to buy the logistics firm.

Property play CDL gained 2.4 per cent or 22 cents to $9.47 after a broker said the stock is undervalued and "remains one of the best proxies to ride on any possible relaxation of property cooling measures".

As property prices and rental rates have been falling amid rising vacancies, the Additional Buyer's Stamp Duty "stands the best chance to be tweaked or removed", DBS Group Research said.

The local market got a boost from institutional investors buying $75.9 million of financial stocks, telcos and energy plays last month compared with fund outflows of $572.4 million last December, DBS said.

Market players are watching the upcoming Committee on the Future Economy report, which will make recommendations on Singapore's growth industries, markets and jobs, among other issues.

The fourth-quarter results season is also in focus. Singapore Airlines fell 1.5 per cent or 15 cents to $9.81, ahead of its third-quarter results today. Blue chips GLP, Sats and Singtel will report on Thursday, followed by ComfortDelGro on Friday. Banks release their results next week.

Meanwhile, Ezra Holdings was the most actively traded counter, plunging 37.5 per cent or 1.8 cents to three cents as jittery investors bailed out on news of a US$170 million (S$240 million) write-down for its exposure to troubled joint-venture company Emas Chiyoda Subsea.

If Ezra fails to secure financial backing from banks and creditors, it will "become a 'going concern' issue especially since its debt far outweighs its shareholder equity," a trader said.

StarHub dropped 6.7 per cent or 20 cents to $2.80 after its fourth-quarter earnings came in below forecasts. Net profit dropped 33.2 per cent while revenue inched up by 0.2 per cent and operating expenses increased 2.7 per cent.

OCBC Investment Research downgraded StarHub from "hold" to "sell", citing "weak earnings visibility" and "no near-term catalyst".

"Its expected dividend cut (the first since full year 2009) also does not bode well for a dividend-yield stock," the broker said.

Other actively traded counters included Jiutian Chemical, which rose 7.7 per cent or 0.1 cent to 1.4 cents, with 188.1 million shares traded.

Equation Summit jumped 10 per cent or 0.3 cent to 3.3 cents with 171.7 million shares traded, while AA Group gained 12.8 per cent or 0.5 cent to 4.4 cents, with 85.7 million shares changing hands.

A version of this article appeared in the print edition of The Straits Times on February 07, 2017, with the headline 'STI pushed up by strong US jobs data'. Print Edition | Subscribe