Business

Upbeat regional data lifts STI

Straits Times Index closes at 3,298.24 after third straight rally, a 2-year high

Singapore stocks mounted a third straight rally yesterday to hit a two-year closing high amid positive economic data in the region.

The Straits Times Index (STI) rose 0.33 per cent or 10.81 points to close at 3,298.24.

The last time the blue-chip benchmark finished the day higher was on July 27, 2015, when it closed at 3,313.42.

Gainers outnumbered losers 261 to 181, or about three up for every two down, with decent activity.

A total of 2.3 billion shares were traded yesterday, which was about 98 per cent of the daily average volume in the first half of the year. The total turnover was $1.3 billion, about 10 per cent above the first-half daily average of $1.2 billion.

Global Logistic Properties remained active following the emergence of a takeover offer before the weekend.

The warehouse developer's stock closed at $3.31, which was up 0.6 per cent or two cents, on the day.

But that stock price remained below the $3.38 offer price.

The deal has mostly gained acceptance among equity analysts, with UOB Kay Hian and Phillip Securities recommending that shareholders accept the bid.

"At an 18 per cent premium to our last target price (excluding six cents dividend) of $2.87 and a 30 per cent premium to latest net asset value of $2.60, we deem the buyout offer a fair price and advise investors to accept the offer," Phillip Securities wrote in a note yesterday.

Another property counter, Ascendas Real Estate Investment Trust, advanced by 1.2 per cent or three cents to close at $2.63. Outside of the merger and acquisition sphere, financials rose on a wave of positive economic data.

Singapore's non-oil domestic exports rose 8.2 per cent year on year in June to $14.7 billion compared with a year ago.

Non-electronics exports carried the rise, expanding by 9.3 per cent on the back of specialised machinery.

SLOWING GROWTH

Electronics exports, however, continued to show signs of slowing growth, with last month's increase of 5.4 per cent year on year, representing a moderation from May's 28.9 per cent growth.

"These data continue to suggest semiconductor exports will likely moderate only gradually this year," Nomura wrote in a note.

China also printed economic growth numbers that beat expectations, as second-quarter gross domestic product grew 6.9 per cent year on year.

Industrial production last month rose 7.6 per cent, one of the strongest performances since 2014.

UOB Kay Hian said it still expects the Chinese economy to slow in the second half of the year, although the broker is raising its full-year forecast for the Asian giant to 6.8 per cent growth from its earlier projection of 6.6 per cent to reflect the strong first half of the year.

"Notwithstanding the upbeat performance in Q2 2017 and first half of 2017, downside risks remain that would curb growth upside," UOB Kay Hian wrote.

"For one, credit creation is likely to turn more subdued in the second half as China's government focuses on managing financial sector risks and deleveraging, as well as the exhaustion of credit quota.

"With an upbeat headline figure in the first half of the year, this has certainly provided more confidence and space for the authorities to continue to tighten liquidity and raise cost of funds."

DBS Group Holdings led the banks higher, gaining 1.6 per cent or 34 cents to close at $21.44. OCBC Bank inched up 0.4 per cent or four cents to head out at $11.09.

United Overseas Bank rose 0.6 per cent or 15 cents to finish at $24.


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