Business

ST Index rallies for fourth straight day

Market sentiment buoyed by positive US earnings and China's upbeat Q3 6.8% growth

Positive US earnings and what can be argued as upbeat data from China as its Q3 growth of 6.8 per cent remained higher than the government's full-year target, spurred the extension of Singapore shares' rally for a fourth straight day.

The benchmark Straits Times Index (STI) added 5.88 points or 0.18 per cent to finish the session at 3,334.91, supported by banking and property counters.

Trading soared after lunch to hit an intraday high of 3,354.27, and then activity dipped, probably tracking the Dow futures - which was down by more than 100 points 30 minutes to closing, before climbing up to pare the losses.

Turnover for the day came in at 3.2 billion units valued at $1.6 billion, or $0.50 for every share.

Excluding warrants, trading was uninspiring given the advance-decline score of 180 to 285.

Top gainers DBS Bank, United Overseas Bank, Singtel, Jardine Matheson and property stocks UOL, City Developments and CapitaLand added a total of 13.5 points to the STI, more than the losses chalked up from the shares of Hongkong Land, OCBC Bank, Keppel Corporation and Singapore Press Holdings, among others.

In the property sector, a buoyant collective sale market helped lift the shares of some players.

UOL's counter reversed losses made on Wednesday to add 24 cents to finish $8.98 on a volume of 3.5 million, while shares of City Developments ended at $13 yesterday, gaining 18 cents with 4.4 million units traded. CapitaLand's shares rose 3 cents to $3.72 on a volume of 15.5 million.

Shares of Chip Eng Seng went up 4.5 cents to $0.95 on a volume of 17 million, days after it was reported that the property developer would buy the Changi Garden retail and residential estate for $248.8 million after it clinched a collective sale tender.

The purchase price is about 27 per cent above the asking price of $196 million and works out to $888 per square foot per plot ratio.

Market mover Singtel yesterday added 2 cents to finish at $3.76 on a volume of 25 million units, making it among the most active. Cushman & Wakefield projected that Singapore would be able to expand its data centre capacity by another 100MW on the back of the Smart Nation initiative, in turn benefiting providers including Singtel, Keppel Data Centres and ST Telemedia.

Tensions in the Middle East have supported the rise in oil prices and related stocks remained in play yesterday, with Magnus Energy and Kris Energy among the actives list.

Across the region, Hong Kong's Hang Seng, Seoul's Kospi and Malaysian shares all ended the day on a lower note, while Tokyo stocks went up, posting their longest string of gains in nearly 30 years. Elsewhere in Australia and New Zealand, the shares advanced.

Mr Josh Crabb of Old Mutual Global Investors shared in a note that the valuation spread between growth and value stands at its highest level since the days of the dot.com bubble.

"For the majority of fund managers who believe in mean reversion, the overriding conclusion must surely be that this trend is unsustainable," he said, adding that future upward earnings momentum is key if Asian markets are to continue to look like good value relative to their developed peers.

"Thus far, corporate result announcements provide further evidence that companies, on the whole, are meeting or bettering expectations. But the fact that Asia is one of the major proxies for global growth will not be lost on value investors."

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

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