Business

STI ends day up 29.75 points

Stock markets in Asia hopeful that Trump's protectionistic tariffs may exempt key allies

Stock markets in Asia recovered ground yesterday, drawing relief from positive US job market data and hopes that US President Donald Trump's protectionistic tariffs may exempt key allies.

Investors struggled to get a read on Mr Trump, who shifted his tariff threats from Europe and to China.

He tweeted that China has been asked to develop a plan to cut its trade deficit with the US by US$1 billion (S$1.3 billion).

It amused many economists who noted that US$1 billion represents a mere 0.27 per cent of the record US$375.2 billion goods trade surplus China had with the US last year.

China was not tickled. Foreign Minister Wang Yi said a trade war would harm all sides.

Lombard Odier Investment Managers believes the uncertainty around US trade policy is likely to remain for some time before clarity emerges.

"We still remain constructive on risk given the continued underlying growth momentum, and are positive on emerging markets in particular, as we see the current trade frictions as more of a one-off than the start of a trend. However, we continue to emphasise that volatility is here to stay (and may start to affect emerging markets on a more sustained basis).

"In that context, seeking downside protection may be a key attribute when it comes to portfolio construction," it advised.

With looming key risks events including Mr Trump's signing of the order imposing tariffs, the European Central Bank meeting, Bank of Japan meeting and US payrolls, market data due, sentiment remains on the defensive, Maybank's analysts said.

Mr Stephen Innes, head of trading Asia Pacific at Oanda also noted that New York is dealing with a deadly snowstorm, which is likely weighing on market participation. The Dow futures - a predictor of where Wall Street will open - lost earlier gains to head south.

In Singapore, the Straits Times Index (STI) finished the day at 3,480.44, up 29.75 points, or 0.86 per cent. Almost two billion shares, worth $1.1 billion, changed hands. There were 279 gainers to 138 losers.

Creative Technology bucked the trend and took a heavy beating, ending at $5.91, down $1.17, or 16.5 per cent, partly on news that co-founder Ng Kai Wa had disposed some of his shares.

He sold 104,350 Creative shares at $939,150 on March 5, and a further 95,650 shares at $868,799 on March 6. After the open market sales, Mr Ng now holds 3.055 per cent of Creative, down from 3.339 per cent previously. Stockbroker Phillip Securities has also imposed trading restrictions on the stock.

In its latest market strategy report, Credit Suisse listed ST Engineering, ComfortDelgro, Singapore Exchange (SGX), Thai Beverage and SingPost as its preferred laggards.

"From a bottom-up perspective, our analysts believe these five stocks appear to have clear turnaround drivers and catalysts over the next 12 months.

"On a market-cap weighted basis, these five stocks offer a dividend yield of 4 per cent, above MSCI Singapore dividend yield of 3.2 per cent,'' its Singapore equity research team said.

It also likes DBS Group and Keppel Corp.

After market close, commodities group Noble was told by SGX Regco to appoint an independent financial adviser to provide an opinion on whether its planned restructuring is not prejudicial to shareholder interest.

Experts have raised concerns over the language in Noble's debt restructuring plans that could absolve Noble, its advisers and representatives from claims or legal action related to its senior creditors' pre-existing debt securities.

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BUSINESS & FINANCE