China data helps STI stay in the black
RELIEF that China did not fare as badly as expected helped the local stock market to stay in the black for a second straight day.
The benchmark Straits Times Index (STI) added 26.3 points or 0.8 per cent to close at 3,334.02 yesterday.
Despite a lack of overnight guidance from markets in the United States owing to the Martin Luther King Day holiday, shares here opened in positive territory and never dipped into the red.
Investors were rewarded for buying in, as markets got a boost with China reporting in the morning that its full-year growth last year stood at 7.4 per cent.
Even though it fell below the government's target of 7.5 per cent and was the slowest growth since 1990, it was above consensus estimates by experts of a 7.3 per cent expansion.
Regional bourses joined in the rally as Shanghai added 1.8 per cent, Hong Kong gained 0.9 per cent, Tokyo rose 2.1 per cent and Seoul was up 0.8 per cent.
Singapore-listed Malaysian stocks fell after Malaysian Prime Minister Najib Razak cut the country's growth forecast for this year and raised its fiscal deficit in the wake of lower global oil prices.
Health-care services provider IHH declined a cent to $1.80, professional services firm Zico lost 0.2 cent to half a cent, while commodities player CNMC Goldmine dropped half a cent to 26.5 cents.
While Malaysia, which derives 30 per cent of its government revenue from oil, has been hit by lower prices, transport operators here are benefiting from lower costs.
DBS Research said in a report yesterday that players like Singapore Airlines, NOL, ComfortDelgro and SMRT would get a lift in earnings from lower fuel prices.
"(We are) positive on transport stocks as long as Brent does not rebound above US$70 per barrel," analysts Paul Yong, Andy Sim and Suvro Sarkar wrote in the report.
SIA increased 15 cents to $12.05, NOL was up four cents to $1.005, ComfortDelgro added a cent to $2.64 while SMRT was flat at $1.615.
Telco M1 jumped nine cents to $3.71 after it announced that fourth-quarter earnings rose 9.9 per cent to $44.5 million.
"The firm had another good 2014, and its earnings growth in the past two years continues to be in the 9 to 10 per cent range, which is good for a pure wireless operator in a saturated, competitive market," wrote Nomura in a research note as it kept a neutral call on M1, citing potential competition risks.
China Everbright Water rose 1.5 cents to $1.05 after its announcement that it will issue 120.7 million new shares at 94 cents each to raise $113.4 million for growth and expansion purposes.