Window-dressing benefits STI
Hongkong Land and banks lift Straits Times Index to 19-month high
Our Monday column suggested that traders stick to the Straits Times Index's (STI) components this week because of the likelihood that with the end of quarter looming tomorrow, the larger blue chips such as the banks and Jardine stocks might enjoy a spot of window-dressing.
The column also discussed the probability that we could even see buying in anticipation of a push tomorrow.
Yesterday, buying of the banks and Jardine stocks was chiefly responsible for the STI rising 26.75 points to a new 19-month high of 3,184.57.
This was despite the Dow futures slipping into the red after a morning rise and a mixed opening for Europe.
The index's largest contributor was Jardine's Hongkong Land, its US$0.37 (S$0.52) jump to US$7.65 on volume of 4.9 million adding about seven points to the STI. Gains for DBS, UOB and OCBC added a further 12 points.
Helping to embolden traders was a firm overnight Wall Street, where stocks managed to reverse several days of weakness by closing in the black.
Rabobank in its daily notes said for now, US investors are still betting on US President Donald Trump succeeding in getting his budget approved.
The bank also noted that US Federal Reserve governor Stanley Fischer on Monday said two more interest rate hikes this year seem "about right" as adding to the market's optimism, since there had been worry that there could be three hikes or more.
The day's most active stock was ISR Capital, which rose $0.002 to $0.013 on volume of 208 million.
The most active company warrant was KrisEnergy's seven-year instrument, which gained $0.006 at $0.083 on turnover of 11.3 million.
The most liquid structured warrant was a Macquarie Bank call on the Hang Seng Index with a 25,000 strike price and an April 27 expiry that gained $0.001 at $0.061 with 155.2 million traded.
KrisEnergy's shares ended $0.006 higher at $0.184 and the Hang Seng Index rose 0.2 per cent.
The NikkoAM-StraitsTrading Asia ex-Japan Reit ETF (exchange traded fund) debuted yesterday, finishing at $1.013 on volume of 401,800.
Singapore Exchange's (SGX) My Gateway investor education portal reported that the capitalisation of Singapore's utility sector has expanded by 80 per cent over the past five years, outpacing the capitalisation growth of the MSCI AC Asia Pacific Utility Index and the parent MSCI AC Asia Pacific Index.
"Together, the 10 stocks of Singapore's utility sector supply water, gas and independent power through renewable electricity production," said My Gateway.
"The 10 stocks have averaged a 5.2 per cent year-to-date gain, similar to the MSCI AC Asia Pacific Utilities Index which gained 4.3 per cent."
Stocks in this sector include Keppel Infrastructure Trust, AusNet Services, Hyflux and China Everbright Water.
State Street Corp yesterday said its global Investor Confidence Index (ICI) increased to 95.4, up 4.2 points from February's revised reading of 91.2.
Confidence among the European investors improved with the European ICI rising 11.9 points to 95, up from February's revised reading of 83.1.
The Asian ICI also rose from 104.3 to 109.6. Meanwhile, the North American ICI declined by 0.3 point from 91.9 to 91.6
Mr Kenneth Froot, co-developer of the Investor Confidence Index at State Street Associates, said: "In the US, significant scepticism remains given the strong run in stocks year-to-date.
"Exiting historically low rates is a policy withdrawal investors have not experienced before; therefore it is natural that such an extreme policy is being questioned."
This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts