STI unmoved by prospect of shutdown

The Singapore stock market stayed on the see-saw yesterday, bouncing back from the previous day's decline and shrugging off concerns about a US government shutdown.

The Straits Times Index (STI) rose 0.37 per cent, or 12.11 points, to close at 3,272.16.

Gainers and losers were evenly matched, with 218 stocks on higher ground compared to 207 that slid. The session was the most active in a quiet week, with 2.2 billion shares worth $1 billion changing hands.

The market headed into the open facing headwinds from the US, where markets had fallen following US President Donald Trump's threats of a government shutdown if Congress did not approve funding for a wall at the Mexican border.

But the STI opened at 3,267.57, about 0.2 per cent higher than its previous close, and did not venture into negative territory for the rest of the day.

"In Asia, markets are more sceptical about the US shutdown and whether that will lead to us seeing an impact in September," IG market strategist Jingyi Pan said.

Favourable technicals have supported the market at about the 3,240 level, although some consolidation in the next few months might be possible, Ms Pan added.

But the week's ambivalence - the market has been alternating between ups and downs - was a sign of caution and uncertainty surrounding the central banks.

The US Federal Reserve's annual Jackson Hole meeting was due to begin yesterday (local time) and Fed chair Janet Yellen and European Central Bank president Mario Draghi were expected to give speeches on Friday (local time).

In Asia, markets are more sceptical about the US shutdown and whether that will lead to us seeing an impact in September.

Jingyi Pan, IG market strategist

There is a lack of consensus about where central bank policy is headed, Ms Pan said.

Although the Fed has begun raising rates, when the next hike will take place, and the pace of increases going forward, are a mystery.

Just as significant and unclear is when the Fed will begin unwinding the massive balance sheet built up through three rounds of quantitative easing.

"It is giving this a lot of event risk," Ms Pan said. Among the top actives, property and investment company Rowsley has been heavily traded over the week, and yesterday, the 361.8 million Rowsley shares that changed hands lifted the stock to the top of the volumes table.

Rowsley stock closed at 11.6 cents, down by 4.1 per cent.

A trader said the activity could be linked to speculation about when Rowsley might announce the next step in its plan to acquire Thomson Medical and Malaysia-listed TMC Life Sciences.

Last month, Rowsley signed a non-binding term sheet to acquire the assets and indicated that a sale and purchase agreement was expected within two months.

There has also been speculation about whether former chairman Albert Hong is done selling his shares.

Mr Hong, who became a substantial shareholder last year and stepped down as chairman this year, has been disposing of his stock over the past year.

He stopped being a substantial shareholder this month, and as a result is no longer obliged to report his trades. "The market is puzzled, trying to figure out whether he was done selling," the trader said. "The market was feeling that every time the stock hit 13 cents, he would be in the market selling."

This article appears in The Business Times today. For full listings of SGX prices, go to btd.sg/BTmkts