Bulls And Bears

STI rallies on strong retail data, global cheer

Traders back in market on expectations US inflation data will limit further Fed rate hikes

Traders here moved back into the market yesterday on expectations that United States inflation data due today would keep a lid on further Federal Reserve rate hikes.

The more optimistic mood sent the Straits Times Index up 22.81 points, or 0.7 per cent, to 3,303.09 - the first bright spot in a lacklustre week.

Singapore Press Holdings was the first index constituent to post results this earnings season, reporting that full-year net profit rose 32 per cent on the previous year. It jumped three cents, or 1.1 per cent, to $2.72.

Hospitality group Banyan Tree Holdings, freshly tapped to run an eco-friendly hotel in a tie-up with Mandai wildlife parks, added half a cent to 65 cents. Singapore Technologies Engineering, where operations are being streamlined in an ongoing review, advanced three cents, or 0.9 per cent, to $3.38.

Separately, retail sales here rose for the sixth straight month to come in ahead of forecasts, growing by 3.5 per cent in August.

Isetan (Singapore) put on 31 cents, or 8.1 per cent, to $4.15, while Dairy Farm International Holdings, which operates chains such as Cold Storage and 7-Eleven, rose 11 US cents, or 1.4 per cent, to US$7.81.

Another retailer that caught a lift was supermarket chain Sheng Siong, which added half a cent, or 0.5 per cent, to 92 cents.

But Singapore Post, after opening its new mall at Paya Lebar, was down by half a cent, or 0.4 per cent, at $1.265. Maybank Kim Eng analyst John Cheong noted the 80.4 per cent occupancy rate but maintained a "hold" call, "pending clearer direction from the strategic review of its business strategy".

Meanwhile, electronics maker Venture Corporation fell 12 cents, or 0.6 per cent, to $18.43. The decline came even as OCBC Investment Research analyst Eugene Chua raised his target price from $14.80 to $20.33 on the basis of its strong earnings and balance sheet.

Spackman Entertainment Group, which is issuing 54.1 million new shares at a premium as it moves to acquire a motion picture producer, lost 0.2 cent, or 1.7 per cent, to 11.9 cents. RHB Securities Research analyst Jarick Seet has kicked his target price down from 23 cents to 20 cents, on the back of the share dilution. But he stuck to his "buy" call, noting that Spackman will have a greater capacity to produce more movies and a strong pipeline of new launches for next year.

Around the region, Wall Street gains helped push Tokyo up by 0.35 per cent while the Seoul Kospi hit a new peak on a rise of 0.68 per cent.

Sumitomo Mitsui Asset Management senior strategist Masahiro Ichikawa pointed to strong Chinese and US manufacturing numbers as factors behind the world economy's "decent shape". But a spot of concern could come from negotiations on the North American Free Trade Agreement, which the US has threatened to quit. Besides US inflation figures, today will also see the release of Singapore's gross domestic product data.

A version of this article appeared in the print edition of The Straits Times on October 13, 2017, with the headline 'STI rallies on strong retail data, global cheer'. Print Edition | Subscribe