Bulls And Bears

US-Mexico deal, rate cut hopes lift STI

Other Asian bourses also up, while tech stocks make strong gains in Singapore

Investors across the region seem to have regained their appetite for risk: Shares rose yesterday on the back of developments in the United States.

Sentiment was buoyed by President Donald Trump suspending tariff plans on Mexico, weak US job data on Friday that raised the possibility of interest rate cuts, and Chinese export data beating expectations.

The Straits Times Index (STI) responded by adding 21.82 points or 0.7 per cent to close at 3,188.11.

Elsewhere, Australia, China, Japan and Malaysia rose, as did Hong Kong, up 2.3 per cent.

Trading here clocked in at 1.10 billion shares worth $1.04 billion, with gainers outpacing losers 264 to 134, while just five of the STI's 30 components ended in the red.

The growing belief that the US will cut rates saw continued interest in real estate investment trusts (Reits) and property developers, key beneficiaries of cheaper loans.

City Developments Limited enjoyed an additional lift, adding 5.9 per cent to $8.97 on its renewed offer for all remaining shares in London-listed subsidiary Millennium & Copthorne Hotels (M&C).

In line with the day's more risk-friendly mood, tech stocks - which faced heavy sell-offs after Mr Trump's trade war with China went tech - made strong gains yesterday.

Venture Corporation added 2 per cent to $15.70 after a Maybank Kim Eng rating upgrade.

Among non-STI tech counters, AEM Holdings surged 9.3 per cent to 94.5 cents while Hi-P International put on 6.6 per cent to $1.29.

Maybank Kim Eng analyst Lai Gene Lih said yesterday that market sell-offs due to growth and trade concerns have overshadowed AEM's positive developments and the recent upward revision of its revenue guidance for the year, making the stock "deeply undervalued".

Maybank Kim Eng has maintained its "buy" call on AEM with a target price of $1.40.

The banks were in the black. DBS Bank ended 0.5 per cent higher at $24.52, OCBC closed up 0.8 per cent at $10.73 and United Overseas Bank added 0.6 per cent to $24.38.

Genting Singapore was the benchmark index's most traded stock, with 47.3 million shares changing hands. The casino operator rose 1.7 per cent to 88 cents.

The session also saw Revez Corporation, formerly Jason Holdings, resume trading on the Catalist after a suspension dating back to Jan 14, 2016. It closed at 14.8 cents, with 1.8 million shares changing hands.

Market watchers will be looking to the G-20 Summit meeting between Mr Trump and Chinese President Xi Jinping to see how events unfold.

A version of this article appeared in the print edition of The Straits Times on June 11, 2019, with the headline 'US-Mexico deal, rate cut hopes lift STI'. Print Edition | Subscribe