Business

No final-day push for STI

Straits Times Index rises before falling for 2016 loss of 0.07 per cent

A quiet week ended yesterday with the Straits Times Index (STI) first rising close to 2,900 but eventually settling back at 2,880.76 for a net loss of 8.39 points for the day and a loss of 0.07 per cent for the year.

For the week, the index managed to add about nine points or 0.3 per cent. Volume throughout the week was low at between $500 million and $600 million between Tuesday and Thursday, though it did spike to 1.4 billion units worth $820.1 million yesterday. The advance-decline score excluding warrants was 243-169.

Traders who were hoping for a final-day window-dressing push on the STI were left disappointed, possibly victims of "buy in anticipation, sell on the day" as the index had risen on Tuesday and Wednesday.

Banks provided most of the support for the index throughout the year, particularly over the past eight weeks on hopes that rising interest rates would translate to higher bank profits.

Yesterday, all three initially rose but closed weaker.

The telco sector was in focus after the authorities announced the award of a fourth licence to TPG Telecom two weeks ago.

We cut M1's FY18/19 core earnings forecasts further to factor in higher risks from... new entrant TPG Telecom. Local broker RHB

Local broker RHB in a Tuesday report said mobile phone firm M1 was likely to be the most affected.

"We cut M1's FY18/19 core earnings forecasts further to factor in higher risks from a potentially disruptive but likely rational new entrant TPG Telecom," said the broker.

"M1 exhibited the largest revenue/Ebitda (earnings before interest, tax, depreciation and amortisation) share decline over the past two years and has the biggest exposure to the domestic market with a lack of bundling opportunity to mitigate subscriber churn."

It set a $2.05 target price and maintained a "neutral" recommendation.

Yesterday, M1 shares closed unchanged at $1.96 on volume of 333,400.

One of the day's most active stocks was underwear specialists Forise International, which announced a renounceable, non-underwritten one-for-two rights issue of up to 1.065 billion new shares at an offer price of $0.023 per share.

WATCH-LIST

Forise's shares ended $0.001 lower at $0.019 on volume of 61 million. Formerly Great Group, Forise was placed on the Singapore Exchange's financial watch-list last March.

Schroders, in its Outlook 2017: Global Bonds, noted that for a short while in July and August this year, every Swiss government bond between one and 50 years was below the magic zero rate of return, which it said was good for the Swiss government but was considerably less good for the Swiss saver.

"What we believe we are currently seeing is a cyclical upswing clearly assisted by easy monetary policy and a bit of a fiscal shot in the collective arm which may continue to tame yields," said Schroders' head of macro strategy Bob Jolly.

"However, central banks will be cautious about removing policy accommodation prematurely and are more likely to take greater inflation risks which, rightly or wrongly, they believe they can bring back under control," he said, adding that the world is no longer as synchronised economically as it was in the days leading up to the global financial crisis or the last seven or eight years.

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