Bulls And Bears

STI up on Frexit relief but caution remains

Regional bourses up after centrist's success in first round of French presidential election

Local shares had a bumpy day yesterday but managed to chalk up a marginal gain, while most of the regional markets closed higher as risk sentiment calmed down after the French election on Sunday.

The success of centrist Emmanuel Macron in the first-round vote eased fears of a French exit from the European Union, sparking in turn an over 4 per cent surge in the French benchmark index CAC 40 in early trading.

Across Asia, Hong Kong rose 0.41 per cent, Tokyo put on 1.37 per cent and Sydney added 0.30 per cent. Singapore's Straits Times Index (STI) closed up 4.20 points or 0.13 per cent at 3,144.03.

The STI dipped to as low as 3,129 points before a livelier afternoon session. Despite the French election news, the overall sentiment is still on the bearish side, remisier Desmond Leong said.

"With most of the major company results already out, there's not a lot of positive catalyst at the moment, and (the United States) market is also slowing down so we're taking cues from that too," he told The Straits Times. "One thing that can jolt the market will be the upcoming banking results, which I think will actually be not bad."

The three banking stocks were the top gainers among the 13 STI stocks that rose. DBS led the trio, rising 23 cents or 1.23 per cent to $19. OCBC Bank was up five cents or 0.52 per cent to $9.64, and United Overseas Bank put on 11 cents or 0.51 per cent to $21.88.

UOB will announce first-quarter results on Friday, followed by DBS on May 2, and OCBC on May 9.

Singapore Press Holdings rose three cents or 0.88 per cent to $3.43, and Golden Agri-Resources added half a cent or 1.47 per cent to 34.5 cents on 24.6 million shares traded.

Meanwhile, 13 STI stocks ended in the red. Hongkong Land Holdings dropped seven US cents or 0.91 per cent to US$7.62, and Ascendas Real Estate Investment Trust lost four cents or 1.56 per cent to $2.53.

CapitaLand Commercial Trust was down 1.5 cents or 0.92 per cent to $1.615, and CapitaLand Mall Trust pared 0.5 cent or 0.25 per cent to $1.995.

CapitaLand Retail China Trust, which is outside the STI, eased two cents or 1.32 per cent to $1.495. But the trust, with 12.7 billion yuan (S$2.6 billion) worth of mall assets in China, is a good pick for analysts such as OCBC's Deborah Ong.

While the first-quarter distribution per unit of 2.74 cents was at the lower range of OCBC's expectations, "we note that indicators for the trust's operational performance were otherwise very encouraging", Ms Ong said.

"After adjustments our fair value increases slightly from $1.56 to $1.58."

The most actively traded stock was Magnus Energy Group. The oil and gas company ended flat at 0.1 cent after 210.7 million shares were traded.

A version of this article appeared in the print edition of The Straits Times on April 25, 2017, with the headline 'STI up on Frexit relief but caution remains'. Print Edition | Subscribe