Bulls And Bears

STI whipsaws before closing just 0.01% up

It gains 5% in 2019; markets upbeat over US-China trade deal heading into new year

Traders were focused on closing their positions yesterday before the curtain came down on 2019, resulting in most of the regional markets ending the year in the red.

That said, the Straits Times Index (STI) was little moved in the half-day session, closing at 3,222.83, up just 0.39 point or 0.01 per cent.

But that does not tell the full story of market activity on New Year's Eve. The STI whipsawed, trading as much as 0.4 per cent higher shortly after the session opened on trade optimism, before retracing those gains.

Markets were handed a gift from the United States-China trade front as they head into the new year.

White House trade adviser Peter Navarro said on Monday that the signing of the "phase one" deal will likely happen in the early part of this month, while the South China Morning Post reported that Chinese Vice-Premier Liu He will lead a delegation to Washington on Saturday to put pen to paper on the agreement.

"These developments serve as another confirmation that relations between the two are on track to recover, which could lift markets when they reopen for 2020 trading," a dealer said yesterday.

AxiTrader chief Asia market strategist Stephen Innes acknowledged the worst-case scenario was averted but markets always look forward.

"But once the 'phase one' deal is signed, investors will then press to consider the 'phase two' risks. After all, how much more progress can be realistically expected ahead of the US elections (in 2020)?"

With trading for the year done and dusted, the STI added 0.9 per cent last month and notched up a 5 per cent gain last year.

Thai Beverage, which dipped 0.6 per cent to 89 cents yesterday, was the STI's top performer of the year with a gain of 45.9 per cent.

But Dairy Farm International, which fell 0.3 per cent to US$5.71 yesterday, was the biggest laggard, shedding 36.9 per cent over the 12 months.

Trading volume on New Year's Eve clocked in at 713.44 million securities worth $618.45 million, with losers beating gainers 182 to 120.

Yangzijiang Shipbuilding was the STI's most actively traded, down 0.9 per cent to $1.12 with 40.6 million shares changing hands.

Mermaid Maritime was the bourse's most active with 61.1 million shares traded. It lost 10.6 per cent to 13.5 cents after revealing that its associate has secured contract extensions worth US$199 million (S$268 million) for two of its jack-up drilling rigs. Mermaid shares surged 31.3 per cent on Monday before the announcement.

A version of this article appeared in the print edition of The Straits Times on January 01, 2020, with the headline 'STI whipsaws before closing just 0.01% up'. Print Edition | Subscribe