Bulls And Bears

No major shift in STI after US midterms

S'pore market rises 0.15%; analysts do not expect big impact from polls outcome

Local shares eked out slight gains yesterday with investors more concerned about getting a handle on the US midterm elections.

United Overseas Bank (UOB) analysts said in a research note that the "outcome is seen as neutral for US equity, while the recent rise of US Treasury yields and the US dollar strength are expected to moderate".

Similarly, OCBC economist Alan Lau noted that US President Donald Trump's trade policy towards China may remain unchanged, adding: "Overall, we are not expecting a major shift in the markets as a result of the midterm elections."

The benchmark Straits Times Index (STI) surged more than 32 points to hit an intraday high of 3,092.95 at 9.27am before finishing at 3,065.36, up 0.15 per cent, or 4.74 points. About 1.57 billion shares worth $1.17 billion changed hands with 234 gainers to 173 losers.

One of the most hotly traded counters was semiconductor equipment maker AEM Holdings, which rose 11.8 per cent to 94.5 cents with 37.9 million shares traded.

This came after CGS-CIMB upgraded its rating on the counter last week from "reduce" to "hold", with a target price of 75 cents. The brokerage believes AEM Holdings is on track to meet its guidance for the 2018 financial year and has a positive long-term outlook.

ComfortDelGro was up 2.6 per cent to $2.36, on the back of news that it is acquiring Buslink, one of Australia's largest privately owned bus businesses, for A$190.9 million (S$187 million). This will be its largest Australian acquisition.

Yangzijiang Shipbuilding gave the index a boost as well, gaining 4.9 per cent to $1.29, while property counters City Developments Limited (CDL) rose 2.5 per cent to $8.49 and CapitaLand added 1.3 per cent to $3.14.

But financials were mixed with DBS dipping 1 per cent to $23.77 and UOB falling 0.4 per cent to $24.55, while OCBC bucked the trend, up 0.2 per cent to $11.34.

Genting Singapore, which fell 1.6 per cent to 91.5 cents, was the biggest drag on the STI. The firm is expected to announce results today along with other industry heavyweights, including CDL and Singtel.

After posting results that largely came in below expectations on Monday, BreadTalk lost 1.6 per cent to 91 cents. RHB has maintained a "sell" rating with a target price of 75 cents, while DBS has a "hold" recommendation with a target price of 98 cents.

On the forex front, market observers concur that risk appetite has recovered after an aggressive sell-off last month.

A version of this article appeared in the print edition of The Straits Times on November 08, 2018, with the headline 'No major shift in STI after US midterms'. Print Edition | Subscribe