Business

STI gains 1.1% for week, 10.2% for Q1

Wall Street stabilises as US investors remain hopeful on Trump budget

The week just past was all about two things - how Wall Street would take the Trump administration's healthcare setback and to what extent quarter-ending window-dressing would manifest itself.

As it turned out, US investors clung on to hope that notwithstanding President Donald Trump's failure to deliver on his healthcare reform, he might still be able to succeed with his budget - even if details on this are still vague.

The outcome was therefore that Wall Street managed to stabilise after a rocky week, though a firm oil market may have also played a role.

As for window-dressing, there was the predictable push on Jardine stocks earlier in the week, particularly Hongkong Land. Yesterday though, the Straits Times Index (STI) managed only a 1.87-point rise to 3,175.11 that brought its gain for the week to 33 points or 1.1 per cent. Its gain for the quarter was 295 points or 10.2 per cent.

Turnover has been patchy of late, though encouragingly, dollar value has remained consistently just above the industry's ballpark breakeven of $1 billion a day. Unit value has also stayed high, suggesting that some degree of "animal spirits" has returned, though it is unclear if this involves heightened retail presence.

Yesterday, thanks to attempts at window-dressing or "portfolio rebalancing'', volume amounted to 2.6 billion units worth $1.6 billion, the highest for the week. Excluding warrants there were 226 rises versus 255 falls throughout.

Apart from Jardine stocks, traders have focused their attention on banks and property counters with the oil and gas sector in peripheral play, depending on how oil prices move.

As noted earlier, penny stocks have seen a fair amount of activity, some speculative and others based on company announcements or developments. In the former category would fall counters such as ISR Capital, Noble Group and other top actives such as Alliance Mineral, the latter on Friday becoming the subject of trading curbs by Phillip Capital.

Apart from Jardine stocks, traders have focused their attention on banks and property counters with the oil and gas sector in peripheral play...

The conditions were that only buy orders through remisiers were allowed and for orders above $50,000, cash was required upfront. The stock on Friday lost $0.045 or 12 per cent at $0.32 on volume of 68 million.

In other news, the Singapore Exchange (SGX) on Thursday announced that it has filed a complaint with China's authorities against Mr Wu Xinhua, executive chairman and CEO of China Fibretech, with respect to several alleged offences under the Chinese Penal Code.

In February, the Securities and Investors' Association of Singapore called on Singapore authorities to investigate instances of alleged mismanagement in China Fibretech and two other S-chips, China Environment and China Sky Chemical Fibre.

SGX's investor education portal My Gateway yesterday said the STI currently has an index-weighted price-earnings (PE) of 13.1 times, which is up from 11.8 times in May 2016, and is now marginally above the five-year average index-weighted PE of 13.0 times.

"The smaller STI stocks maintain relatively larger PE ratios, with the average PE of the 30 STI stocks at 16.9x," said My Gateway.

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