Bulls And Bears

STI up 1.66% on vaccine hopes, Wall Street rally

Regional bourses also post strong gains, as more economies ease Covid-19 restrictions

Vaccine hopes and Wall Street's rally kept optimism levels up among local investors yesterday.

The buoyant mood sent the Straits Times Index up 42.05 points, or 1.66 per cent, to 2,581.33.

Major regional bourses including Hong Kong, South Korea, Japan and Australia also posted strong gains.

The market euphoria is unfolding as more economies ease restrictions that had led to one of the steepest downturns since the Great Depression.

Hong Kong was up 1.9 per cent, Japan rose 1.5 per cent, and South Korea added a hefty 2.3 per cent - its highest close since March 6 and biggest daily gain in a month. Australia ended 1.8 per cent higher while Malaysia gained 1 per cent.

Phillip Futures analyst Samuel Siew noted the encouraging outcome of an early-stage trial by Moderna on an experimental vaccine and said: "Currently, hopes for a potential Covid-19 vaccine appear to be outweighing the rising geopolitical (US-China) tensions."

Mr Jeffrey Halley of Oanda cited the small sample size of the trial, adding that in the best-case scenario, it could take a year for "normal life" to make a comeback. "That story (about the hope of a vaccine) may yet contain heartbreak for bulls."

In Singapore, 1.8 billion shares worth $1.54 billion were traded with gainers outpacing losers 293 to 179. Yesterday's extended gains from Monday were once again led by lenders DBS, United Overseas Bank and OCBC Bank, which rose by between 1.7 per cent and 2.8 per cent.

One of the day's more active counters was Yoma Strategic, with 33.4 million shares worth $8.5 million traded. The counter gained 4.2 per cent to 25 cents.

DBS Group Research issued a "buy" call on the counter, with a target price of 50 cents after Yoma's recent tie-up with Alipay operator Ant Financial Services Group to spur its investment in a financial services provider in Myanmar.

Perennial Real Estate Holdings rose 5.2 per cent to 61 cents. At one point, it jumped to a high of 66 cents.

It announced on Monday night that certain substantial shareholders were mulling over options on their holdings in the company.

"The extraordinary policy support, both monetary and fiscal, is combining with greater optimism of an economic rebound," AxiCorp's Stephen Innes told Agence France-Presse.

The upbeat mood also saw higher-yielding, riskier currencies rise against the dollar, with the Australian and New Zealand dollars both up more than 1 per cent.

A version of this article appeared in the print edition of The Straits Times on May 20, 2020, with the headline 'STI up 1.66% on vaccine hopes, Wall Street rally'. Print Edition | Subscribe