Banks drive stock rally

Singapore shares continued their rally for the fifth straight session yesterday, driven mainly by gains in banking stocks.

The benchmark Straits Times Index (STI) added 18.99 points or 0.57 per cent to close at 3,325.07.

The blue-chip benchmark had on Tuesday closed at 3,306.08 - breaching the 3,300 threshold for the first time in two years.

Some 3.6 billion units worth $1.6 billion changed hands, with gainers outnumbering losers 311 to 170.

The rally on the index came even though the Dow was on Tuesday dragged down by Goldman Sachs Group Inc after it reported a 40 per cent fall in bond trading revenue.

IG market strategist Jingyi Pan had cautioned in her morning note yesterday that "resistance is seen ahead at 3,352".

She said investors should look out for a more decisive close above the 3,300 level, adding that policy woes from both the United States on both healthcare and trade could keep a lid on gains.

Back home, shares of the three banks added a combined eight points to STI, with OCBC Bank's counter leading the way.

Shares of OCBC closed 12 cents higher at $11.20, while United Overseas Bank added 17 cents to finish at $24.25 and DBS climbed six cents to $21.86.

The most active counter was that of real estate and investment company Rowsley. Its shares jumped 6.8 cents to close at $0.141. About 469 million units were traded.

Rowsley, controlled by Singapore billionaire Peter Lim, had on Tuesday said Mr Lim would inject his 100 per cent Thomson Medical and 70.36 per cent Bursa Malaysia-listed TMC Life Sciences stakes into the firm.

The proposed acquisitions were valued up to $1.9 billion, and were to be financed through up to 25.3 billion new shares issued to Mr Lim at 7.5 cents a share.

WARRANTS

Warrants would also be issued to existing shareholders upon completion.

Contributing to yesterday's lively market was Singapore's biggest listing in six years - the mainboard trading debut of NetLink NBN Trust, a business trust that designs, builds, owns and operates the passive fibre network infrastructure of Singapore's Next Gen NBN.

Singapore Exchange said the listing contributed to initial public offering market capitalisation of more than $3.1 billion and funds of more than $2.3 billion were raised.

Across the region, Hong Kong's Hang Seng Index rose for an eighth straight day yesterday, lifted by interest from mainland traders concerned about a Beijing crackdown on high-risk dealing on financial markets.

Malaysia stocks also rose, while Tokyo stocks ended higher as bargain hunting overshadowed a stronger yen.

Citi Research said in its Asia economics and strategy daily note that equity markets continue to be cheered by improving earnings, metals and energy commodity prices were rising, and implied volatility was falling across asset markets.

In emerging markets, the health of the Chinese economy provides strong support, although fears about tightening regulatory oversight remain a risk, it said.

"In sum, the macro backdrop once again appears to be rather favourable for carry trades and for adding exposure to under-owned emerging market assets.

"Positioning in emerging markets also appears to be modest, allowing room for an extension of the rally," it said.

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