Bulls And Bears

STI rallies amid firm regional sentiment

Positive outlook on Wall Street drives up market too; all 3 local banks end higher

Singapore stocks rallied strongly yesterday after an extended weekend, amid generally firm sentiment across the region and the futures market pointing towards further gains on Wall Street.

The market was also anticipating further fiscal stimulus to be unveiled by Deputy Prime Minister and Finance Minister Heng Swee Keat at his fourth Budget statement for the year yesterday.

This came just as the Ministry of Trade and Industry (MTI) said Singapore's gross domestic product would shrink by between 4 per cent and 7 per cent this year. MTI had previously forecast a contraction of between 1 per cent and 4 per cent.

The local benchmark Straits Times Index (STI) closed at 2,530.30 yesterday, up 30.47 points or 1.22 per cent. Much of the gains was driven by the three local banks, which were the most heavily traded stocks by value.

DBS closed at $19.44, up 1.36 per cent. OCBC Bank closed at $8.61, up 1.41 per cent. United Overseas Bank closed at $19.69, up 1.18 per cent.

Among the smaller stocks, there was renewed enthusiasm for beneficiaries of the Covid-19 pandemic.

In particular, Riverstone jumped 13.9 per cent to close at $2.13, marking a new 52-week high. Its previous 52-week high was $1.97.

The manufacturer of nitrile gloves achieved a 54.3 per cent rise on first-quarter earnings this year to RM46.6 million (S$15.2 million), on a 16.2 per cent rise in revenue to RM279.4 million.

It plans to raise its capacity by up to 1.4 billion pieces of gloves per annum to bring total annual capacity to between 14 billion and 15 billion pieces by 2023.

Elsewhere, fellow glove maker UG Healthcare climbed 12.12 per cent to close at 37 cents, while personal protective equipment maker Medtecs International rose 7.34 per cent to 19 cents.

Key regional indexes mostly closed in positive territory as investors cheered Japanese Prime Minister Shinzo Abe's decision to lift the state of emergency and end coronavirus-induced restrictions nationwide. The country's benchmark Nikkei advanced 2.55 per cent, with air and land transport companies leading the rally, Reuters reported.

South Korea closed up 1.76 per cent to settle at its highest level since early March. Hong Kong jumped 1.88 per cent. China's Shanghai Composite Index rose 1.01 per cent, and the Shenzhen Composite Index ended up 2.21 per cent. Australia ended 2.93 per cent higher in its best session since April 9.

A version of this article appeared in the print edition of The Straits Times on May 27, 2020, with the headline 'STI rallies amid firm regional sentiment'. Print Edition | Subscribe