Bulls And Bears

STI extends gains as greenback stays weak

Trading volume lifted by debut of NetLink NBN Trust, biggest IPO here in six years

Asian markets yesterday extended their rally as the US dollar stayed weak after the Republican Party's failure to repeal Obamacare.

The collapse of the healthcare Bill calls into question President Donald Trump's ability to push through his pro-growth policies.

Hong Kong's Hang Seng Index was up 0.6 per cent, the Nikkei 225 rose 0.1 per cent and the Shanghai Composite put on 1.4 per cent.

At home, the benchmark Straits Times Index (STI) rose 0.6 per cent to close at 3,325. Trading volume reached a level not seen since May, with 3.6 billion shares worth $1.6 billion changing hands. Gainers outnumbered losers 311 to 170.

Volumes were buoyed by the debut of NetLink NBN Trust, Singapore's largest initial public offering (IPO) in six years with a massive offer size of $2.3 billion.

Some 184.4 million units changed hands over two hours of trading that began at 3pm. NetLink units opened at 81.5 cents but closed flat at 81 cents, which was its IPO price.

Though shareholders may have hoped for a price rise, the fact that there was none is a healthy sign of a market that is not over the top.

Besides, the IPO was two times subscribed and NetLink NBN Trust was the second most active counter yesterday, after Rowsley.

Rowsley shares jumped 6.8 cents or 93.15 per cent to 14.1 cents after controlling shareholder and former "remisier king" Peter Lim unveiled plans to inject medical assets said to be worth up to $1.9 billion into the firm. Some 469.9 million shares changed hands on news of Rowsley's plan to acquire all of the private firm Thomson Medical and a 70.36 per cent stake in Malaysia- listed TMC Life Sciences.

The earnings season is in full swing this week, bringing more volatility to the market.

M1 tumbled 16.5 cents or 7.86 per cent to $1.935 on volume of 23.7 million after its major shareholders said on Tuesday night that their strategic review has concluded with no buyers. It did not help that the telco's earnings report out the same day had missed estimates.

DBS Vickers has downgraded M1 to fully valued from buy and lowered its target price to $1.78 from $2.54. OCBC downgraded M1 from hold to sell with a fair value of $1.75, from $1.96, citing a "weak earnings outlook, which translates to lower dividends ahead".

Elsewhere among mid-caps, shipbuilder Nam Cheong last night held an informal meeting with holders of its three tranches of outstanding bonds - $90 million due on Aug 28, $75 million due next year, and $200 million due in 2019 - to update them on its restructuring options. Today, punters will look for a similar update from the company on what hope there is for its shares.

A version of this article appeared in the print edition of The Straits Times on July 20, 2017, with the headline 'STI extends gains as greenback stays weak'. Print Edition | Subscribe