Bulls and bears

STI rallies as Greek MPs pass bailout deal

Banks lead the charge after Federal Reserve chief reiterates plan to raise US interest rates

Local shares rallied in line with most of Asia yesterday, on news that Greek lawmakers passed a controversial bailout deal.

"In the near term, that puts a stop to bad news from Greece," said remisier Desmond Leong.

The benchmark Straits Times Index rose 14.59 points to 3,353.45, leaving it up 2.6 per cent for the shortened trading week.

Banks led the way after United States Federal Reserve chairman Janet Yellen reiterated on Wednesday that the Fed would probably raise US interest rates this year, given the more upbeat economy.

DBS gained 0.8 per cent or 18 cents to $21.38, OCBC added 1.28 per cent or 13 cents to $10.33 while UOB was up 0.3 per cent or seven cents to $23.29.

  • Markets highlights

  • 1. The euro has fallen to the lowest level in seven weeks against the dollar as European Central Bank president Mario Draghi reiterated that he will be providing stimulus to the euro area. While the Greek Parliament has agreed to the tough reforms, protests are taking place in Athens.

    2. The earnings season in the United States has kicked off in earnest. Banks such as Citigroup and Goldman Sachs announced their results yesterday. The economy is also in focus with US jobless claims falling last week, indicating a recovering labour market.

    3. Growth is also an issue with the Asian Development Bank downgrading its forecast for Asian economies.
    South-east Asia will see slower growth than the previously forecast 4.6 per cent for this year, weighed down by lower-than-expected first-half performances in Singapore, Indonesia and Thailand.

    4. Auric Pacific's chief executive officer in charge of its food group, which includes Sunshine Bakeries, has quit. Ms Chong Lee Buay, who joined in February 2013, is leaving to pursue other interests, the company said.

    5. Mainboard-listed property developer Oxley Holdings is buying a 20 per cent stake in the enlarged share capital of Galliard Group, a leading British developer which trades as Galliard Homes, for £50 million (S$106.8 million).

DBS Equity Research, in a report released yesterday, said the "rate hike impact is net positive for Singapore banks".

Penny plays continued to be the most actively traded, with CEFC International jumping 19 per cent or 1.6 cents to 10 cents, with 77 million shares traded.

New Silkroutes Group, formerly Digiland International, plunged 50 per cent or 0.1 cent to 0.1 cent, with 42.2 million shares traded.

The former computer distributor has been hogging the actively traded list for the past week after recently announcing plans to transform into an oil and gas company.

"There has been buying action in recent days as investors are betting on the revival of the company due to the change of business," Mr Leong said.

Shareholders are looking to New Silkroutes' newly appointed chief executive officer, Dr Goh Jin Hian, the son of Emeritus Senior Minister Goh Chok Tong, to turn Digiland's fortunes around after several years of losses.

International Healthway Corp (IHC) was flat at 30 cents, with 40.5 million shares traded, after the company announced that it would buy up shares of Healthway Medical through a scheme of arrangement.

IHC will pay 10 cents a share.

Ezra Holdings was also among the most actively traded counters, rising 0.6 per cent or 0.1 cent to 15.8 cents, with 29.4 million shares traded. The offshore support vessel owner is in the midst of a rights issue, which seeks to raise up to US$300 million (S$410 million) to repay existing debt.

"The last day to subscribe for Ezra rights is July 20. The rights shares are scheduled to be listed on July 29," said Mr Leong.

A version of this article appeared in the print edition of The Straits Times on July 17, 2015, with the headline 'STI rallies as Greek MPs pass bailout deal'. Subscribe