Upbeat Yellen testimony props up STI

Gradual approach to rate hikes by Fed seen as a good sign; banks also help lift S'pore shares

A global rally helped lift Singapore equities yesterday, as traders were heartened by the dovish tone in US Federal Reserve chair Janet Yellen's testimony to the Congress.

Dr Yellen delivered an upbeat assessment of the United States economy on Wednesday night, while signalling that future rate hikes will be gradual - sending Wall Street 0.57 per cent higher overnight.

Sentiment here was buoyant too, as a result: The benchmark Straits Times Index (STI) advanced 26.76 points, or 0.83 per cent, to 3,235.67, snapping a two-day losing streak. Total turnover on the bourse amounted to 1.58 billion shares worth $1.04 billion.

Hong Kong led gains in the region with a 1.16 per cent jump. Shanghai added 0.64 per cent, Sydney rose 1.11 per cent, while Tokyo was flat as it edged up 0.01 per cent.

"It mostly seems to be down to Yellen," Rabobank quantitative analyst Bas Van Geffen told Reuters. "The fact that it seems like the Fed is going to take it slowly is being seen as a good sign by the equity markets and by the currency markets."

The STI's rebound was thanks in part to local lenders. DBS Group Holdings shot up 2.1 per cent or 43 cents to $21.03, United Overseas Bank rose 1.5 per cent or 35 cents to $23.60, and OCBC Bank climbed 0.7 per cent or eight cents to $10.91.

Global Logistic Properties (GLP) sought a trading halt before markets opened, pending an announcement. Reports said it picked a Chinese bidder consortium fronted by GLP chief executive Ming Mei for final-deal talks. The stock last traded at $2.70 on Wednesday.

CapitaLand rose 1.1 per cent or four cents to $3.57, following an announcement that the group, along with CapitaLand Commercial Trust (CCT) and Mitsubishi Estate Co, is redeveloping Golden Shoe Car Park into a mixed-use project for an estimated $1.82 billion before acquisition costs. CCT was up 1.2 per cent or two cents to $1.67.

Meanwhile, uncertainty continued to feature prominently in the offshore and marine space.

Falcon Energy, which said on Wednesday that it plans to ask bond holders of its $50 million of notes due September to extend the maturity date by three years and waive all covenants, slumped 6.3 per cent or 0.3 cent to 4.5 cents.

Nam Cheong jumped 5.3 per cent or 0.1 cent to two cents, after it said late on Wednesday it will convene an informal meeting with note holders of its three bonds totalling $365 million next Wednesday to update them on restructuring options.

Sincap Group was the most active stock, gaining 4.5 per cent or 0.1 cent to 2.3 cents on 217.5 million shares done, despite opening much lower at about two cents.

The company said it has received a requisition letter to convene an extraordinary general meeting to remove the directors. It is also in the process of confirming if the special notice conforms to the provisions under the Companies Act.

A version of this article appeared in the print edition of The Straits Times on July 14, 2017, with the headline 'Upbeat Yellen testimony props up STI'. Print Edition | Subscribe