Bulls And Bears

STI rises in line with regional bourses

Traders focus on hopes of a rate cut in the US and stimulus measures in China

Local shares had another good day, with interest remaining strong on property counters while trade concerns went on the back burner.

The more optimistic mood sent the Straits Times Index (STI) up 21.47 points or 0.7 per cent to 3,209.58.

US President Donald Trump's threats to raise tariffs on China if he failed to meet his Chinese counterpart at the G-20 summit had little effect on regional markets. Investors were keener to focus on hopes of a rate cut in the United States and further stimulus measures by China to bolster slowing growth.

Australia, China, Hong Kong, Japan and Malaysia closed higher with Shanghai the stand-out, up 2.6 per cent.

Trading volumes here clocked in at 964.67 million shares worth $987.59 million, with gainers outpacing losers 245 to 170. The benchmark index had just three of its 30 components in the red.

Investors have spent the past days piling into real estate investment trusts (Reits) and property counters and judging by yesterday's activity, little changed.

A dealer suggested that investors could consider counters like Bukit Sembawang, Ho Bee Land and YanLord Land, which have "yet to really participate in the recent rally".

Much of the spotlight yesterday was on CapitaLand, which posted its largest intraday gain in over two months to close 3 per cent up at $3.41. The developer said it will divest three malls in China to CapitaLand Retail China Trust (CRCT) for 2.96 billion yuan (S$589 million). CRCT units fell 1.9 per cent to $1.53.

OCBC Investment Research downgraded the Reit to "sell" after market close with a fair value estimate of $1.38. OCBC analyst Deborah Ong said that while the transaction strengthens CRCT's portfolio by expanding its reach in China and adding to its tenant diversity, the financing plan for the acquisitions remains a short-term concern.

DBS Equity Research was more bullish on CRCT, noting that the transaction "should enhance the visibility of CRCT as an attractive proxy to SGX-listed China-focused Reits among investors". DBS has a "buy" call with a target price of $1.65.

Tech counters continued their ascent. Venture Corporation added 2.6 per cent to $16.11, AEM Holdings closed up 4.8 per cent at 99 cents while Hi-P International added 4.7 per cent to $1.35.

Among the banks, DBS Bank closed 0.7 per cent higher at $24.68, OCBC Bank added 0.75 per cent to $10.81, while UOB climbed 0.6 per cent to $24.53. Genting Singapore was the benchmark index's most traded stock, adding 1.7 per cent to 89.5 cents on trade of 46.7 million.

A version of this article appeared in the print edition of The Straits Times on June 12, 2019, with the headline 'STI rises in line with regional bourses'. Print Edition | Subscribe