Business

STI grows on hopeful trade talk news

STI closes 43.62 points higher at 3,244.77; gainers outnumber losers 223 to 191

Markets looking for a boost from positive trade talk news got something like it yesterday, after US President Donald Trump told reporters on Tuesday that he is open to extending the deadline for a US-China agreement if the two parties seem close to a deal.

While Mr Trump said he was generally not inclined to delay raising tariffs beyond the March 1 deadline, global markets climbed broadly, gaining on hope for a breakthrough in the talks due to start today.

Another threat to sentiment showed signs of lifting, as Mr Trump expressed unhappiness but not direct objection to the latest deal on border security brokered by a bipartisan committee. The agreement, meant to avert a government shutdown due tomorrow, offers just US$1.375 billion (S$1.9 billion) in border wall funding, which Republican leaders have called a "down payment" on the wall.

Mr Trump is expected to go along with the deal, albeit grudgingly, as he has said he is seeking other ways to fund the border wall and does not see the country entering another shutdown.

As things stand, the deadlines look as though they may pass without incident, said ING's chief economist head of research Asia-Pacific Robert Carnell.

"This may not be a bad thing if it means that the chances of a deal of some sort, whether on US-China trade, the US border wall, or Brexit, are increased."

Singapore's Straits Times Index (STI) traded upwards all day, closing 1.36 per cent or 43.62 points higher to 3,244.77. Turnover on the bourse was 1.29 billion securities worth $1.23 billion, and gainers outnumbered losers 223 to 191, or about seven securities up for every six down.

Rex International led active trading, losing 0.1 cent or 1.06 per cent to $0.093 on volume of 73.2 million shares.

It was followed by Ezion Holdings, which gave up 0.2 cent or 4.25 per cent to $0.045 with 49.4 million shares traded.

All but five STI constituents ended in the black, led by financials. DBS Group Holdings picked up 56 cents or 2.3 per cent to close at $24.90, and United Overseas Bank gained 62 cents or 2.45 per cent to $25.96. OCBC Bank ended at $11.65 after rising 16 cents or 1.39 per cent.

Hutchison Port Holdings Trust (HPH Trust) led the index's laggards, losing one US cent or 3.85 per cent to close at 25 US cents after 15.8 million units were traded. The trust reported a net loss of HK$12.11 billion (S$2.1 billion) on Tuesday night, on the back of an unexpected HK$12.3 billion non-cash impairment loss.

Following the news, OCBC Investment Research downgraded its call on the counter from "buy" to "sell" yesterday.

OCBC analyst Deborah Ong noted that as a result of the impairment, HPH Trust now trades at a historical price to book ratio of 0.66 times.

"While this figure is still below the five-year average of 0.73 times, we no longer find HPH Trust's price levels attractive, given the macro uncertainties," she wrote.

Ahead of its FY2018 results after market close, ComfortDelGro picked up five cents or 2.15 per cent to $2.38 with 13.7 million shares traded. A Citi Research report on Tuesday noted that bus earnings have become ComfortDelGro's major earnings contributor, but news related to its taxi operations "remains noisy".

"While technology disruptions from transport service providing apps pose as a threat to ComfortDelgro's market share, we believe government initiatives to regulate and level the playing field with the traditional transport service providers like ComfortDelgro will reduce such threats," the analysts wrote.

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