STI closes higher, taking cue from US

Gainers outnumber losers, with Yangzijiang Shipbuilding the most active counter

Local shares drifted higher yesterday, following the tone set by Wall Street where the focus shifted away from tensions on the Korean peninsula and towards brighter job data in the United States.

The Straits Times Index (STI) gained 12 points or 0.37 per cent to finish at 3,277.26 - up 0.54 per cent for the shortened trading week. The STI closed 1.57 per cent down for August.

Yesterday's session was near its end when reports came in that the US had flown some of its most advanced warplanes to South Korea for bombing drills in a show of force against North Korea.

In the broader Singapore market, turnover climbed to $1.5 billion with 2.2 billion shares changing hands. Gainers outnumbered losers 217 to 181.

Earlier, the Nasdaq had led gains in US equity benchmarks, rising 1.05 per cent after non-official data showed better-than-expected private job creation in August. More eyes will be on the official non-farm payroll numbers due today.

Ratings agency S&P, meanwhile, has warned that a disruption in US government spending if Congress fails to raise the nation's debt ceiling this month could be "more catastrophic" than the 2008 failure of Lehman Brothers.

However, UOB analysts noted that the disaster brought by Hurricane Harvey could have a silver lining: "Congress is now expected to combine emergency aid for Harvey victims in September with stop-gap government funding and a debt-limit increase."

Yangzijiang Shipbuilding was the top active counter on the local bourse, tumbling 13 cents or 8 per cent to $1.495 on volume of 217 million after reaching a multi-year high on Wednesday. It said overnight that it had entered into a placement agreement with JP Morgan for 137 million new shares, or 3.6 per cent of its existing share capital, at $1.53 apiece.

CIMB analyst Lim Siew Khee said in a note yesterday: "This is a surprise as the company had a strong balance sheet with net cash of 304 million yuan (S$64 million) as of the first half of the year.

"We believe proceeds will be used to acquire the other 20 per cent stake in Xinfu shipyard, LNG technology mergers and acquisitions and participate in private capital investment in China."

Sincap Group was the third most traded counter, falling 0.1 cent or 5 per cent to 1.9 cents after it announced the proposed placement of up to 450.25 million new shares at a minimum of 1.8 cents each. The new shares represent 33.3 per cent of Sincap's enlarged share capital.

Yamada Green Resources called for a trading halt yesterday pending an announcement.

A version of this article appeared in the print edition of The Straits Times on September 01, 2017, with the headline 'STI closes higher, taking cue from US'. Subscribe