Bulls And Bears

STI sees gains despite lacklustre turnover

Sentiment buoyed by latest factory output data; all eyes on Trump's upcoming tax plan

Singapore equities rose yesterday to snap a two-day decline ahead of the release of United States President Donald Trump's long-awaited tax reform plan.

The benchmark Straits Times Index (STI) advanced 24.11 points, or 0.75 per cent, to 3,236.15, although turnover across the bourse was still lacklustre, with 984.8 million shares worth $982.4 million traded.

Sentiment here was likely helped by data on Tuesday which showed that factory output, powered by the electronics sector, jumped 19.1 per cent year on year in August to clock a double-digit expansion for the third straight month.

"More importantly, the growth beyond the electronics segment could indicate that the recovery is spreading to other sectors, possibly (helping) the positive momentum going into the last quarter of 2017 for cyclical stocks such as property and banks," KGI Securities (Singapore) said in a note.

Elsewhere in the region, Tokyo lost 0.31 per cent, Sydney retreated 0.12 per cent and Kuala Lumpur eased 0.08 per cent.

But Hong Kong added 0.47 per cent on the back of a rebound in real estate stocks, while Shanghai inched up 0.05 per cent.

Investors remain cautious as they look to Mr Trump's tax overhaul plan - to be out early today - where he is expected to slash rates for corporations in what he said would be a "very powerful document".

Much of the gains on the STI yesterday were in the three local banks, likely boosted by US Federal Reserve chair Janet Yellen's speech that was seen by many as hawkish in terms of interest rate hikes.

DBS Group Holdings rose 1.8 per cent or 37 cents to $20.89, United Overseas Bank was up 1.4 per cent or 34 cents to $23.84 and OCBC Bank climbed 1 per cent or 11 cents to $11.28.

Bourse operator Singapore Exchange (SGX) put on 0.1 per cent or one cent to $7.45. This came as Goldman Sachs raised its call on the stock from "neutral" to "buy", citing an improving volume and earnings outlook. "SGX has underperformed peers and the Singapore index year to date as earnings expectations were revised down. That said, we believe the earnings cuts should come to an end and volume recovery will prompt upward revisions to consensus," said Goldman Sachs.

Mapletree Industrial Trust added 0.5 per cent or one cent to $1.85, after saying on Tuesday that it will expand its investment strategy to include real estate and real estate-related assets used primarily as data centres overseas.

Anchor Resources received a trading query from the SGX after surging to 8.2 cents in the morning, although it later eased to finish at 7.6 cents, 0.2 cent lower than the previous day's close. The group said it was not aware of any reason behind the unusual trading activity.

The day's top traded counter was Rowsley, up 0.2 cent to 13.1 cents on 122.7 million shares done.

A version of this article appeared in the print edition of The Straits Times on September 28, 2017, with the headline 'STI sees gains despite lacklustre turnover'. Subscribe