Singapore shares rally ahead of US Fed rate rise, STI closes 25 points up

The benchmark Straits Times Index closed 0.9 per cent up at 2,840.92 on Wednesday.
The benchmark Straits Times Index closed 0.9 per cent up at 2,840.92 on Wednesday.PHOTO: ST FILE

SINGAPORE - Singapore shares enjoyed a relief rally ahead of the long anticipated US interest rate lift-off expected on Thursday, thanks to a rebound on Wall Street and in oil prices.

The Straits Times Index closed 0.9 per cent or 25.40 points up at 2,840.92 on Wednesday.

"It's a welcome relief rally after a very depressing week. The market is betting on a small rate hike," remisier Alvin Yong said.

The Dow Jones Industrial Average climbed 0.9 per cent. Brent was up 1.29 per cent, at US$38.41 (S$54) a barrel, while West Texas Intermediate settled at US$37.35 a barrel, up 2.86 per cent.

Noble Group was the most actively traded stock, jumping 7.7 per cent or three cents to 42 cents, with 67.6 million shares traded. This after the company said on Tuesday that it is in talks to sell its 49 per cent stake in Noble Agri to China's food giant Cofco for around US$700 million-US$750 million.

"The company confirms that it is in advanced discussions with potential purchasers on both this sale and other strategic transactions, but no definitive or legally binding documents have yet been signed," Noble said.

Cofco acquired 51 per cent of Singapore-listed Noble's agriculture unit in April 2014 for US$1.5 billion.

The rebound in oil lifted oil-related plays including Keppel Corp, which jumped 2.1 per cent or 13 cents to S$6.42. Ezion rose 5.3 per cent or three cents to 60 cents, with 24.3 million shares traded; Ezra gained 1.1 per cent or 0.1 cents to 9.6 cents, with 15.2 million shares traded; and Rex International climbed 1.1 per cent or 0.1 cents to 8.8 cents, with 13.8 million shares traded.

Neptune Orient Lines edged up 0.4 per cent or 0.5 cents to S$1.23, with 27 million shares traded Wednesday. French shipping line CMA CGM, which is offering to take over Singapore's container shipping firm Neptune Orient Lines (NOL) for US$2.4 billion, has been buying NOL shares on the open market.

DBS Group Research maintained a buy call, citing "multiple benefits" for CDL.

The deal "enables the group to tap third party capital to extract shareholder value on its balance sheet, enabling CDL to recycle its capital to other investments," DBS said.

"Supported by a strong balance sheet and diversified earnings base, CDL should be able to weather the current uncertain market conditions well," it said.

OCBC Investment Research however, has a hold call on CDL.

While OCBC likes that CDL continues to monetize its non-core assets and strengthen its balance sheet in a slowing market, it said it "remains cognizant of the headwinds in the group's core domestic development segment and see challenging conditions going forward."