Bulls And Bears

STI up on Clinton's showing in US debate

Investors cheer her 'win' over Trump in presidential debate, but analysts urge caution

Singapore shares clawed back ground after early losses to end on a high note yesterday as investors cheered what they saw as Democratic nominee Hillary Clinton's win over her Republican rival Donald Trump in the first United States presidential election debate.

The Straits Times Index (STI) closed up 0.36 per cent or 10.29 points to 2,860.23, buoyed by Singtel, which rebounded 0.8 per cent or three cents to $3.99.

Banking counters also got a reprieve, with DBS Group gaining 0.7 per cent or 10 cents to $15.30, and OCBC up 0.6 per cent or five cents to $8.59. ComfortDelGro gained 1.1 per cent or three cents to $2.79, and CapitaLand climbed 0.6 per cent or two cents to $3.17.

While local stocks tracked initial gains in US futures after it appeared that Mrs Clinton had trumped her rival in their first face-off, at least one expert flagged concerns that the closeness of opinion polls seems to have been ignored by the market.

Bank of Singapore chief investment officer Johan Jooste said that is "a dangerous thing, given how close the race is now and how perilous it has proven in the recent past to be complacent about 'obvious' election outcomes".

"Political risk is not a thing of the past just because Brexit is over," he added.

Sentiment over Singapore stocks will likely remain fragile heading into the US election on Nov 8.

"Historically, US equity indices tend to be more volatile during presidential election years where the incumbent is not seeking re-election," DBS Group Research said.

And with Singapore's corporate earnings in recession and a recent slew of weak manufacturing and services-related economic data, investor mood is likely to stay guarded ahead of the third-quarter results season next month, it added.

Pennies remained hotly traded yesterday, with GCCP Resources losing 1.7 per cent or 0.1 cent to 5.8 cents, on 48.9 million shares traded. The company said it could not explain the unusual volume movements in its stock after it was queried by the Singapore Exchange.

Noble Group gained 2.2 per cent or 0.3 cent to 14.1 cents, with 145 million shares traded. Magnus Energy was flat at 0.2 cent on trade of 69.6 million shares while Rex International extended gains for a second session, jumping 8.1 per cent or 0.5 cent to 6.7 cents, with 63.7 million shares changing hands.

A bout of short-covering sent Ezra Holdings up 5.5 per cent or 0.3 cent to 5.8 cents, with 234.2 million shares traded.

Traders are speculating that Ezra will get the funds needed to refinance maturing debt after it held talks with lenders, said Mr Joel Ng, an analyst at KGI Fraser Securities.

United Engineers jumped 4.6 per cent or 11 cents to $2.52 after a joint announcement by key shareholders OCBC Bank and Great Eastern suggested that a stake sale is being explored.

A version of this article appeared in the print edition of The Straits Times on September 28, 2016, with the headline 'STI up on Clinton's showing in US debate'. Print Edition | Subscribe