Singapore market a hive of activity
STI rises 30.74 points to close at 3,238.73, with advances beating decliners 228 to 148
With high expectations of a dovish interest rate outlook in the US, investors in the local equities market took to picking up stocks in the lead-up to June's US Federal Reserve meeting.
That gave a fillip to Singapore's Straits Times Index (STI) to close at 3,238.73, rising 30.74 points or 1 per cent.
IG market strategist Pan Jingyi said: "Every bit of data was expected to feed into the expectations with regard to the Fed's stance this week, and Monday's data releases out of the US had certainly joined the camp of supporters for dovishness."
In recent days, it has become less a case of whether US interest rates will be lowered but a matter of when. Other central banks, such as Australia's and the European Union's, also added to the case for dovishness.
Vanguard Markets managing partner Stephen Innes expected a neutral day of trading in Asia but noted: "There's always an opportunity at every turn, and the prospect of lower interest rates is an attractive proposition for the interest sensitive Singapore market.
"Unless the underlying global economic market malaise improves, I would view this as a short-term rebound and will probably have a short shelf life."
The local market was a hive of activity, with trading volume clocking in at 1.47 billion securities, 23 per cent over the daily average in the first five months of 2019. Total turnover came to $1.19 billion.
Across the market, advancers trumped decliners 228 to 148. Just four of the STI's 30 components closed in the red.
Real estate investment trusts (Reits) and property developers, which are among the main beneficiaries of lower borrowing costs, continue to be in favour.
Among them, CapitaLand Commercial Trust units added four cents or 1.9 per cent to $2.11 while UOL was 13 cents or 1.8 per cent up at $7.28.
SELL-OFF
But the race for such picks did not extend to all counters. ESR-Reit faced a heavy sell-off, shedding 3.5 cents or 6.2 per cent to 53 cents on 53.8 million units changing hands.
The Reit announced on Monday a joint venture deal to acquire a warehouse, undertaking asset enhancement initiatives at two existing properties and a private placement exercise.
UOB Kay Hian trading representative Brandon Leu said: "I believe the key reason for the sell-off was down to the discount at which the private placement units were offered - at 51.5 cents - to last Friday's closing price (56.5 cents). As such, we saw the counter close near the issue price."
DBS Group Holdings closed 13 cents or 0.5 per cent up at $24.80.
OCBC Bank gained 15 cents or 1.4 per cent at $10.95 while United Overseas Bank finished at $25.60, advancing 49 cents or 2 per cent.
Dealers noted that the banking trio rallied on expectations of a dovish Fed at a time when the global economy has a growth slowdown and frosty US-China trade issues to contend with.
Telecom stocks continued their upward trend, led by NetLink NBN Trust. The business trust saw its units add one cent or 1.1 per cent to 88 cents on 31.6 million units traded.
NetLink's recent rally also presented an opportunity for investors to take profit.
In a note to clients, remisier Ernest Lim said that those who wished to, could consider taking profit on NetLink in tranches.
Market watchers also told The Business Times that NetLink was overbought.
Yesterday also saw the listing of Malaysia-headquartered producer of energy-saving products TrickleStar on the Catalist board.
It opened at 26.5 cents, up 1.9 per cent from its initial public offering price of 26 cents. The counter eventually closed at 34 cents.
For full listings of SGX prices, go to https://www2.sgx.com
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