Business

Positive midweek performance for STI

Index up 0.3% with investors wavering between anxiety and optimism

It was a mixed day for Asian equities, but the local market fared better than many regional peers.

The Straits Times Index (STI) gained 10.96 points or 0.3 per cent to close at 3,340.42.

Across the Asia-Pacific, markets in Australia, Hong Kong and South Korea finished higher; China, Japan and Malaysia ended lower.

As one trader put it, the mood among investors in Asia "was one caught between being anxious ahead of US Federal Reserve chairman Jerome Powell's testimony on Wednesday, and measured optimism that the US and China are back in trade talks".

IG market strategist Pan Jingyi, referring to the trading in Singapore yesterday, told The Business Times: "The local Singapore market had certainly picked up on the boost for prices at the start of the session, though a sense of caution had certainly set in thereafter, with most of the gains erased by the end of day."

Trading volume on the Singapore bourse clocked in at 1.22 billion securities.

This was just over the daily average in the first six months of 2019.

However, total turnover, at $973.22 million, was 92 per cent of the January-to-June daily average.

Across the market, advancers pipped decliners 193 to 188.

The benchmark index had eight of the STI's 30 components trading in the red.

Thai Beverage stocks added one cent or 1.1 per cent to close at 88 cents, with 24.8 million shares changing hands - the most among benchmark index components for the second successive session.

The local banks all ended higher.

DBS Group Holdings gained $0.08 or 0.3 per cent to $25.40, OCBC Bank added $0.08 or 0.7 per cent to $11.48 and United Overseas Bank closed at $26.41, up $0.19 or 0.7 per cent.

ComfortDelGro, which garnered much attention from investors this week on hopes of public transport fare revisions, closed $0.02 or 0.7 per cent down at $2.82 on 10.8 million shares traded.

Market participants took interest in the transport operator after the government disclosed on Monday that it will review how public transport fares are determined.

Until the review is completed, a temporary grant will be provided to support rail operators.

With hopes of fare revisions on the horizon, ComfortDelGro shares had added 2.5 per cent on Tuesday.

The shares of the transport operator - the second-best performing counter on the STI so far this year after Thai Bev - has gained 31 per cent in the year up to Tuesday.

Inclusive of dividends, it is up 35 per cent over the same period.

That said, KGI Securities downgraded the stock to "neutral" on the back of the company's valuations being "stretched" at current prices.

The brokerage's head of research Joel Ng said ComfortDelGro's dividend yield for the year up to Tuesday "has compressed to 3.7 per cent for FY2019, which is among the lowest in our high-dividend watch list".

Maybank Kim Eng analyst Luis Hilado, who has maintained a "hold" recommendation on ComfortDelGro with a target price of $2.76, believes that the market "will view the grants as recurring rather than exceptional items".

UOB Kay Hian analyst Lucas Teng, the most bullish of the lot, maintains a "buy" call with a higher target price of $3.08.

"The temporary grant for rail could lift the loss-making Downtown Line while a private-hire licensing law could further diminish competition," he said.

Mainboard-listed Cordlife Group was one of the most actively traded counters on the Singapore Exchange, surging 8.5 cents or 16.5 per cent to close at 60 cents on 35.2 million shares traded.

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