S'pore shares manage to close slightly up
Benchmark index ends 0.08% higher after sentiment picks up with positive data on China's producer prices
After a weak start to the day, Singapore equities managed to cap the day's session slightly higher even as investors grew a little cautious yesterday.
Energised by Chinese data, the benchmark Straits Times Index added 2.66 points, or 0.08 per cent, to end at 3,423.91, after a weak start right from opening bell. Turnover came in at 2.5 billion worth $1.5 billion, while losers beat gainers 288 to 158.
Throughout the day, the index struggled to trudge upwards, weighed by the Jardine group of companies, which clocked combined losses of over 11 index points.
Despite this, the three banking stocks - DBS, OCBC and UOB - helped push the index up 16 points.
DBS led the trio, surging 54 Singapore cents to $24.30. UOB jumped 17 Singapore cents to $25.38, and OCBC rose eight Singapore cents to $11.84.
Investor sentiment picked up after data showed that China's producer prices came in surprisingly strong last month, while consumer inflation picked up pace.
Analysts said all signs point to a robust economy although they expect further price pressure as the government's crackdown on smog hurts factory output.
In the telco sector, shares of Singtel closed down two Singapore cents at $3.76 on volume of 29.5 million, while that of StarHub went up 10 Singapore cents to end at $2.83 with 15.6 million units changing hands. Both were on the actives list.
UOB Kay Hian's analyst Jonathan Koh has placed a "buy" call on Singtel's stock as the telco reported underlying net profit of $929 million for Q2 FY18, "in line with our forecast of $923 million".
"The results included exceptional gain of $1,960 million (previous estimate: $1,895 million) from the divestment of 75 per cent stake during the initial public offering of NetLink NBN Trust," he added.
Another actively traded stock was Best World International, which lost 15.5 Singapore cents to close at $1.26 on a volume of 19.3 million.
Maybank Kim Eng had maintained its "buy" call on the stock with a target price of $1.88, citing the promise of strong Chinese sales that more than offsets the firm's weaker business in Taiwan.
The broker added that Indonesia is likely to be the next growth market.
Making its trading debut was Keppel-KBS US Reit, whose stock opened at 89.5 US cents (S$1.21), higher than the initial public offering price of 88 US cents. The counter ended the day at 89 US cents.
China's trade growth slowed in line with consensus forecast in October, said Mr Rob Carnell, ING's head of research for Asia.
Slowdown in exports of coal and steel products led the overall export growth lower, he said, adding that this is a phenomenon caused by overcapacity reduction in coal and steel sectors, which hints that the current production of these raw materials would not be enough to serve domestic demand and therefore fewer of these products are being exported.
"We do not expect trade data to have a significant implication for the Chinese yuan. We believe China's strong economic fundamentals warrants a stronger currency. We forecast USD/CNY at 6.50 by end-2017 and at 6.30 by end-2018," he added.
This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts