Business

Singapore shares rise for 5th straight day

Blue-chip index buoyed by China leaders' commitment to supporting domestic economy and anticipation of US tax cuts

The Singapore share market extended its winning streak yesterday, notching up a fifth consecutive day of gains.

Local stocks ended 0.3 per cent higher, with the Straits Times Index (STI) moving up 9.83 points to 3,173.76.

The blue-chip index was buoyed after China's leaders said that they would improve financial support for the country's real economy, and also in anticipation of tax cuts by US President Donald Trump.

Interestingly, a study by an economics professor at the University of Bonn in Germany found that there was "surprisingly little evidence that populists are bad for markets", according to a Bloomberg report yesterday.

The researcher, Professor Moritz Schularick, found that historically speaking, bond yields fell two years after populists took power, and that five years after, stocks gained, sovereign credit ratings improved and currencies appreciated.

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That phenomenon could possibly go some way towards explaining an apparent Trump trade that seems to have held up markets of late, though corporate earnings in the US have been solid as well.

In Singapore, gainers outnumbered losers 260 to 204, or about nine up for every seven down yesterday.

About 2.66 billion shares worth $1.35 billion in total changed hands, which worked out to an average unit price of $0.51 per share - indicating a heavier focus on second-liners.

The most actively-traded counter was Addvalue Technologies, which supplies satellite-based communication terminals.

The stock fell $0.002 to $0.048 with 97.4 million shares changing hands.

Other actives included commodities trader Noble Group and C&G Environmental Protection.

Over in the blue-chip aisle, the STI's advance was driven by stocks such as property developer Hongkong Land, casino operator Genting Singapore and local banks DBS and OCBC. UOB dipped after going ex-dividend.

A handful of other property counters fared well.

City Developments and CapitaLand, two of Singapore's largest real estate developers, saw their share prices go up, as did industrial landlord Ascendas Real Estate Investment Trust (A-Reit) and mall owner Frasers Centrepoint Trust (FCT). OCBC Investment Research and RHB both retained their "buy" ratings on FCT, while UOB Kay Hian stuck to "hold".

OCBC Investment Research noted that FCT managed to raise its portfolio rents by 4.1 per cent for its fiscal second quarter, and "management sounded more upbeat about the prospects of Changi City Point, given encouraging shopper traffic and tenant sales figures, coupled with an improvement in interest from prospective tenants".

It added that the trust's renovation of the Northpoint shopping mall was "progressing on schedule, with robust leasing interest from prospective tenants".

Its target price for FCT units was $2.28.

RHB said it expected the trust to buy at least one property by the end of the year and a key acquisition target was the Waterway Point shopping mall in Punggol, of which the trust's sponsor owns a one-third stake.

Its target price was $2.22 per unit.

UOB Kay Hian had a target price of $2.15 and an entry price of $1.90, saying that its valuation was based on a two-stage dividend discount model with 6.4 per cent required rate of return and terminal growth rate of 1.2 per cent.

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