STI closes up 27 points on positive leave from Wall Street, Chinese rally

A file picture of a digital screen displaying stocks index data in Singapore. PHOTO: AFP
A file picture of a digital screen displaying stocks index data in Singapore. PHOTO: AFP

SINGAPORE - Singapore shares tracked a positive lead from Wall Street and a rally in Chinese stocks in the last hour of trade on Wednesday on suspected intervention from Beijing.

The benchmark Straits Times Index recovered above the 2,850 support, rising 26.80 points or 0.94 per cent to 2,868.74.

Ahead of the keenly awaited United States Federal Reserve's decision on interest rates this week, a growing number of investors are selling bond holdings and buying risk assets like equities and currencies, IG market analyst Bernard Aw noted.

"Risk sentiments were improved tentatively, and the risk-on mode seemed to be tentative and speculative rather than based on fundamentals. ... The China Securities Finance Corp (CSFC), which is the state-designated agency to lead the support efforts, was reportedly buying blue chips," he said.

Traders will be eyeing the US inflation report for clues on the likelihood of a September rate hike. "Expectations are for a 0.1 per cent month-on-month decline in headline CPI, and a mild 0.2 per cent gain on year-on-year terms. A better-than-expected result would raise hopes of a rate move in September," Mr Aw said.

Genting Singapore was among the most actively traded stocks, climbing 6.2 per cent or 4.5 cents to 77.5 cents, with 55.3 million shares traded after Macquarie upgraded its call to outperform from underperform.

Mr Somesh Kumar Agarwal, an analyst with Macquarie Capital Securities (Singapore), said the casino operator's stock price has fallen 40 per cent in the past year, and believes it has been "sufficiently punished for Singapore market's declining gross gaming revenues, and its own poor capital management over the past 12 months."

Genting is the cheapest casino stock in Asia by a distance when Macau stocks are still trading between 9-18 times while Philippine stocks are trading between 10-13 times, Mr Agarwal said.

Ahead of its inclusion into the STI on Sept 21, Chinese shipbuilder Yangzijiang Shipbuilding jumped 4.2 per cent or five cents to $1.23, with 39.5 million shares traded.

Shares of Hyflux jumped 5.2 per cent or 3.5 cents to 71 cents on news that a consortium comprising the water services firm and its partner Mitsubishi Heavy Industries has been chosen by the National Environment Agency to build a $750 million waste-to-energy plant here.

Penny plays, also among the most actively traded, were mixed, with Ezra Holdings up 2.5 per cent or 0.3 cent to 12.3 cents, with 74.4 million shares traded; Noble Group dipped 2.2 per cent or one cent to 45 cents, with 63.4 million shares traded. Jeweller Soo Kee Group, which has a market cap of $120.9 million, closed flat at 21.5 cents.

Meanwhile, Healthway Medical Corp, which is the target of an acquisition by International Healthway Corp (IHC), called for a trading halt yesterday. The Singapore Exchange said last week that a "handful of individuals" who appear to be connected to one another have accounted for more than 60 per cent of the trades in IHC since April 2015 by trading among themselves.