Business

Banks finish higher, boosting a quiet day

Trading described as featureless, with 1.9 billion shares worth $858 million traded

The Straits Times Index yesterday managed a 17.34-point rise to 3,246.35 in a quiet but firm session, in which a low 1.9 billion units worth $858 million were traded.

Its rise was in tandem with gains in the Dow futures and in Hong Kong, where the Hang Seng Index rose 0.6 per cent.

Also helping was Friday's US jobs report that provided some assurance that economic growth is back on track.

However, although there were 249 rises versus 193 falls excluding warrants, brokers described the session as featureless and lacking in excitement.

"It has been like this for many weeks now," said a dealer. "If you are not in certain stocks, then there is not much for you to do or look forward to."

Among blue chips, it probably came as no surprise that banks were the main drivers of the index's gain, with all three finishing higher.

The day's most actively traded stock was Addvalue Technologies, which ended unchanged at $0.053 after 174 million changed hands. Intra-day high was $0.056.

Other familiar names in the top actives list included Jadason, Alliance Mineral and DISA.

Among the notable moves in the second line was a $0.05 rise of Noble Group shares to $0.625 on turnover of 28 million shares.

Shares of CapitaLand ended $0.03 higher at $3.52 with five million shares done.

Macquarie Warrants (MW) in its Friday newsletter noted that the stock was an outperformer in the first quarter with a 20.2 per cent rise, but it managed only 3.6 per cent in the second quarter.

Still, MW said Macquarie Equities Research (MQ) after a recent China visit continues to rate CapitaLand as the top property developer in Singapore.

"The recent opening of four integrated developments in China, new management contracts from Ascott and CapitaLand Mall Asia will help drive CapitaLand's recurrent income growth over the next few years," said MQ.

Based on a revalued net asset valuation methodology, MQ's 12-month target price for CapitaLand is $4.18.

Shares of Venture Corp gained 0.20 at $12 on volume of 803,000 shares.

OCBC Investment Research noted that since Venture Corp's shares reached its 2017 high of $13.07 on May 11, they have corrected 9.7 per cent to $11.80 on Friday, a fall in line with a correction in the US in the technology sector.

"That said, having recorded a strong start to FY17, Venture's long-term positive outlook remains intact as we expect margins improvement to persist as its strategy of value creation for customers continues to bear fruit, coupled with continuous efforts to increase productivity," said the broker.

It recommended a "buy" with a $13 fair value.

Schroders in its talking point this month noted that the strength of equities so far this year against a backdrop of falling bond yields and elevated political uncertainty has raised the question as to whether investors are becoming complacent.

"Their complacency is evidenced by the new lows seen in the Chicago Board Options Exchange Volatility Index, often referred to as the 'fear gauge'," said Schroders, as it pointed out that one explanation was that investors were now comfortable with the three primary factors that had driven volatility in recent years.

"Specifically, concerns about the Fed tightening monetary policy, China's currency policy and the oil price have all eased.

"We would add that the current low level of volatility today also owes something to favourable political outcomes in Europe, where there has been no swing towards populism."

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