STI ends week 1.1% higher

The Singapore bourse capped the week's trading on a limp note, with the Straits Times Index (STI) losing 3.81 points, or 0.1 per cent, to close at 3,420.1.

This was no thanks to Wall Street's correction on Thursday night, led by disappointment that the much-awaited corporate tax cuts in the United States have been pushed to 2019.

But that does little to take the shine away from the recent feat pulled off by the STI - over five trading sessions from Nov 3 to Nov 9, the stock market's key barometer gained 1.3 per cent, reaching as high as 3,429.21, a level last seen in May 2015, according to the Singapore Exchange's investor education portal My Gateway.

Year-to-date, the index is up nearly 19 per cent. Week-on-week, the STI remained in positive territory, gaining nearly 38 points, or 1.1 per cent.

Yesterday's lacklustre showing followed the weak lead from US stocks. The deep corporate tax cuts promised by US President Donald Trump were long awaited by investors, hence the news of a delay was a major letdown.

The anti-climatic news was reflected across other key Asian bourses. Japan's Nikkei 225 was down 0.8 per cent, Hong Kong's Hang Seng fell marginally by 0.1 per cent, while South Korea's Kospi and Malaysia's KLCI both fell 0.3 per cent.

Market analysts contended that after a strong rally, the markets were ripe for a correction.

"The reaction in markets was not a surprise, given that investors have been pricing in a lot of good news, and further pullback may continue for a couple of days or weeks, as many stocks look overbought at the moment," said FXTM chief market strategist Hussein Sayed.

CMC Markets Singapore analyst Margaret Yang Yan pointed out that daily turnover in the Singapore bourse has picked up in recent days.

This, she said, may be a sign that market participants are more active in shares trading closer to the peak of the earnings season.

Oil prices are on the rise, with Brent Crude having risen this year from a trough of US$44 a barrel in June to US$63 a barrel, led by high demand, falling inventories and confidence that Opec will extend production cuts, in addition to the geopolitical risk premium from tensions in the Middle East.

"While this pales in comparison to the drop from US$115 to US$45 over June 2014 to January 2015, in percentage growth terms, it is still a large rise of 43 per cent," said Nomura.

Turnover in the local bourse stood at 2.2 billion shares worth $1.3 billion. Losers outpaced gainers, with 236 counters down and 206 counters up.

Noble Group shares reacted predictably, falling two Singapore cents, or 7.4 per cent, to 25 Singapore cents following the release of a dismal set of results.

The Hong Kong-based commodity trader posted a third-quarter net loss of US$1.17 billion (S$1.59 billion), taking its losses for the year so far to US$3.05 billion.

Trading in Cosco Shipping International shares perked up, with the stock jumping six Singapore cents, or nearly 16 per cent, to 44 Singapore cents with some 55 million shares worth $23 million traded.

The counter has gained over 40 per cent since it announced the takeover of Singapore-listed logistics firm Cogent Holdings a week ago.

Yangzijiang Shipbuilding Holdings also rallied, gaining 7.5 Singapore cents, or nearly 5, per cent to $1.64. It reported a three-fold jump in quarterly net profit on the back of a 13 per cent rise in revenue

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