Bulls And Bears

Modest gains nudge STI up on nondescript day

Investors unsure if upside surprises from US corporate results are sustainable

Modest gains at the end of the yesterday's session managed to turn a nondescript day into something of a winner for the local market.

The Straits Times Index (STI) added just 6.67 points or 0.2 per cent to 3,356.95 after opening lower, following a muted session on Wall Street overnight triggered by mixed corporate results.

Trade clocked in at 951.06 million shares worth $1.04 billion with gainers pipping losers 195 to 191.

At least Friday's effort did help the benchmark index to end the week up 0.3 per cent.

XTM market analyst Han Tan noted: "As the latest US corporate earnings season rolls along, investors appear unsure as to whether the upside surprises are sustainable, even though almost 80 per cent of the results so far have exceeded market expectations."

CMC Markets' Margaret Yang added that investors in Asia were also "less positive on lacklustre economic data from South Korea as well as China possibly scaling back its stimulus measures".

Genting Singapore was the blue-chip index's most traded. The casino operator closed up 0.5 per cent at 97 cents, with 29.7 million shares changing hands.

The three local banks, which are set to release their earnings for the first quarter in the next two weeks, outperformed the index.

Venture Corp posted first-quarter net profit of $90.9 million on Thursday, up 8.6 per cent on the previous year, falling in line with street expectations. Revenue rose 8.5 per cent to $928.8 million.

But that did not stop its shares from falling 9.2 per cent to $17.52, with the market seeming more concerned with near-term implications that the firm could face "performance volatility" due to some customers' product transitions.

Penny plays were active during yesterday's session, with Nam Cheong the most active counter with 38.5 million shares traded. The offshore vessel builder closed 22.2 per cent higher at 1.1 cents.

"I believe that the activity on Nam Cheong is speculative as traders are hoping that improving oil prices and potential sector recovery could benefit the company," a trader said.

Among non-STI counters, AEM Holdings closed 0.9 per cent lower at $1.15 even as United States-listed Intel, which is understood to be AEM's major customer, saw its shares drop 7.6 per cent in after-market trading on Thursday over the cautious outlook.

"Surprisingly, AEM's shares did not drop much during trading on Friday. This could be due to Huawei (another one of AEM customer's) buffering the effect of Intel's cut forecast," a remisier noted.

A version of this article appeared in the print edition of The Straits Times on April 27, 2019, with the headline 'Modest gains nudge STI up on nondescript day'. Print Edition | Subscribe