Bulls And Bears
STI snaps 3-day losing streak after Fed boost
Investors cheered by plan to buy debt of US firms and Singapore's phase 2 reopening
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Marissa Lee
The Straits Times Index (STI) rose 52.97 points, or 2.03 per cent, to 2,666.85 yesterday, snapping a three-day losing streak after the US Federal Reserve said on Monday that it would begin buying the debt of individual US companies.
The Fed had previously bought only exchange-traded funds.
Its commitment to go directly to the aid of distressed companies persuaded equity investors to stop worrying about the disjuncture between markets and the economy.
Singapore investors cheered too, as parts of the economy will resume business on Friday as the coronavirus infection rate stabilises.
About 1.6 billion securities worth $1.57 billion changed hands yesterday. Gainers outnumbered losers 355 to 124.
Retail-focused real estate investment trusts (Reits) staged a strong rebound after the Singapore Government announced late on Monday that it would start to relax lockdown measures from Friday, earlier than expected.
Lendlease Reit rose 7.35 per cent to 73 cents. CapitaLand Commercial Trust rose 6.4 per cent to $1.83. CapitaLand Mall Trust rose 4.9 per cent to $2.14.
DBS analyst Derek Tan wrote in a report yesterday: "While we had anticipated the end of the storm for the retail sector to be close as per our recent upgrade on May 29, the move to shift forward phase 2 reopening comes as a positive surprise.
"The green light will be given for more than 90 per cent of all retail tenants in the various malls to resume operations. On-the-ground sentiment shows that Singaporeans... are ready to flock out of their individual households after being cooped up for almost 21/2 months."
Top active Rex International rose 11.66 per cent to 18.2 cents on volume of 132.6 million.
Top gainer DBS closed 1.69 per cent higher at $21.66.
Top loser Jardine Matheson closed 1.16 per cent lower at US$42.61.
Tuan Sing, which has interests in real estate, hospitality and printed circuit board manufacturing, surged 25.53 per cent to 29.5 cents after DBS Research initiated coverage yesterday with a target price of 38 cents.
Regional markets returned to risk-on mode.
The Hang Seng Index rose 2.39 per cent, the KLSE gained 1.26 per cent, the Shanghai Composite went up 1.44 per cent, and the Nikkei advanced 4.88 per cent.
The rally will continue over the next few days, said Oanda Asia-Pacific market analyst Jeffrey Halley.
"The world is definitely moving to growth over graves now though."
