Business

STI's rally for 5th day fuelled by optimistic markets

Optimism in major economies and firm US and local earnings continued to fuel Singapore equities' staying power yesterday after it extended gains made in the past four sessions.

Supported by heavyweights Keppel Corp, DBS Bank and OCBC Bank, the Straits Times Index (STI) ended the session at 3,340.73, up 5.82 points or 0.17 per cent, tracking the Dow futures, which was up more than 70 points shortly before closing.

IG analyst Jingyi Pan said in her note that the US Senate's passing of a Budget vote on Friday was a turning point in the heightening of expectations of a tax overhaul.

"The news yielded a sharp uptick for the US dollar index, while markets remain in anticipation of a higher US open on Friday with futures pre-empting the move."

STI's rally brought the total gains for the week to 21.62 points or an increase of 0.65 per cent, even though yesterday's closing did not manage to break through the previous high of 3,354.

Turnover for the day came in at 2.5 billion units worth $1.2 billion. Trading was firm with gainers beating losers 253 to 188, excluding warrants.

Among the top gainers was Keppel Corp whose stock alone added more than 4 points to the STI and was among the most active.

Its shares rose by 28 cents to close at $7.30 on a volume of 15.9 million, buoyed by the first climb in operating profit from a year ago since late 2014. Its Q3 net profit was up 30 per cent to $291.8 million.

In a report by OCBC Investment Research yesterday, the broker placed a "buy" call on Keppel Corp with a higher target price of $7.73.

Property was the top contributor to the group's earnings at 68 per cent, followed by investments at 18 per cent and infrastructure at 14 per cent.

Under property, the group is looking at the possibility of redeveloping Keppel Towers; the Serangoon North project is also expected to be launched in mid-2018, it said.

DBS and OCBC added a total of 4.6 points to the index, with DBS' counter closing at $21.84, 14 cents higher on a volume of 7.8 million. Shares of OCBC, of which its third quarter results are expected next Thursday, added five cents to finish at $11.49, with 3.3 million units changing hands.

Penny stocks were in play, many making it to the actives list.

In particular, shares of Spackman Entertainment closed at 11.6 cents, up 0.3 cent on a volume of 27.4 million units. Last week, it proposed acquiring Studio Take, a Korean film production company, through the purchase of Take Picture for about $3.93 million.

Counters in the red included Jardine Matheson, UOL Group, United Overseas Bank, Jardine Strategic and Singapore Exchange.

These contributed a combined loss of about 5 points to the index.

Across the region, Tokyo's Nikkei posted its longest winning streak in nearly six decades and Seoul's Kospi rose to an all-time high yesterday, lifted by the Bank of Korea's upgrade of the economic outlook.

Hong Kong's Hang Seng surged, erasing the previous day's sharp losses as investors were cheered by hopes of a market-friendly tax-cutting plan from the US.

Malaysian shares bucked the trend by closing lower.

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