Bank stocks help STI gain 3.13 points

A meeting of oil-producing countries and a modestly positive economic outlook for Singapore danced on the minds of investors yesterday as financials led the Straits Times Index (STI) to a modest gain of 0.1 per cent or 3.13 points to 3,234.37.

Gainers outnumbered losers 276 to 183, or three up for every two down.

A total of 2 billion shares changed hands, about 82 per cent of the daily average over the first four months of the year. Total turnover was $1.2 billion, about 96 per cent of the January-to-April daily average.

"Market sentiment is quite bullish," CMC Markets market analyst Margaret Yang said. "However, although the market has been trading up, volumes have been shrinking compared to the first quarter... And because the market is trading near its two-year high, we are seeing some consolidation here and there and trading in a range."

Bank stocks DBS Group and OCBC Bank lifted the blue-chip STI as official estimates guided for slightly better economic growth in Singapore this year.

DBS Bank grew by 0.19 per cent or four cents to close at $21.04. OCBC Bank added 0.38 per cent or four cents to $10.47.

The Ministry of Trade and Industry yesterday kept its forecast for 2017 economic growth at 1 per cent to 3 per cent.

However, the ministry said that full-year growth this year will probably be higher than the 2 per cent expansion last year.

"Noble is still very speculative. We have very limited visibility of the future plans of the company."

CMC Markets market analyst Margaret Yang

The guidance for stronger growth this year matched most economists' expectations.

Nomura said semiconductor-related manufacturing is supporting its forecast of 2.5 per cent growth this year, although it is estimating a slowdown to 1.5 per cent growth in 2018.

"Our forecast implies that growth will slow," Nomura said. "As we expect semiconductor demand to moderate gradually through the rest of the year, we forecast gross domestic product (GDP) growth slowing to 2.4 per cent year on year in H2 from 2.7 per cent in H1.

"The decline in non-oil domestic exports growth to minus 0.7 per cent in April from 16.5 per cent in March already hints at slower GDP growth in Q2 than in Q1."

The STI could have boasted a stronger performance on the day if not for Singapore Telecommunications, which had a second day of loss.

Singapore's largest telco shed 0.53 per cent or two cents to head out at $3.73.

Commodity trader Noble Group bounced back from five straight declines to rise 9.09 per cent or 3.5 cents to finish at 42 cents.

Noble's stock has been particularly volatile this week, as Standard & Poor's cut the group's credit rating from B+ to CCC+ and raised concerns about potential for default within a year.

Reuters reported that China state-owned conglomerate Sinochem was no longer pursuing an investment in Noble.

But Noble has said discussions about its strategic review, including talks with potential partners, are still ongoing.

"Noble is still very speculative," Ms Yang said. "We have very limited visibility of the future plans of the company."

Looking ahead, US markets could be headed for a rally overnight, Ms Yang said.

"US futures are doing really well during Asia hours," she said. "Right now they're headed to a new record high."

Oil counters held firm in anticipation of a meeting of the Organization of the Petroleum Exporting Countries (Opec).

Keppel Corp slipped 0.15 per cent or one cent to close at $6.58, while Sembcorp Marine eased 0.58 per cent or one cent to $1.71 at the close.

Opec members yesterday agreed to extend cuts in oil production for another nine months, to March next year, but declined to make additional cuts. Non-Opec producers are expected to match production levels.

This article appears in The Business Times today. For full listings of SGX prices, go to btd.sg/BTmkts