Sep 20, 2016

    Fillip from oil price, rebound in region

    A REGIONWIDE rally lifted local shares yesterday ahead of key policy meetings in the United States and Japan later this week.

    The benchmark Straits Times Index (STI) added 24.69 points, or 0.87 per cent, to 2,852.14, extending gains made on Friday.

    Elsewhere, Shanghai added 0.77 per cent and Hong Kong rose 0.92 per cent as they reopened after a holiday.

    Sydney dipped 0.04 per cent following a trading glitch while Tokyo was closed for a holiday.

    The buoyant sentiment here came despite Wall Street's poor showing last Friday, when it fell 0.49 per cent, dragged down by banks and energy stocks.

    The STI was also helped by an uptick in crude prices following news that Opec (Organization of the Petroleum Exporting Countries) and non-Opec members are close to reaching an agreement to stabilise the over-supplied market.

    All eyes are on the US Federal Reserve's meeting tomorrow although expectations for a rate hike have eased.

    There is also much speculation on how the Bank of Japan (BoJ), which meets on the same day, plans to rejuvenate the economy.

    "The sell-off we saw in (the) past two weeks had been driven largely by tightening liquidity conditions in the financial markets," Kelvin Wong, chief technical strategist for Asia at City Index, told The Straits Times.

    "But expectations now are for the Fed to stand pat on interest rates on Wednesday, and possibly some stimulus measures from the BoJ. For traders, it's good news for now.

    "All of this will help to increase liquidity in equity markets even though the global economic fundamentals are still not picking up."

    Of the 30 STI constituents, 24 closed stronger while five fell into the red. Only one - StarHub, at $3.46 - was unchanged.

    Property group Hongkong Land was one of the biggest gainers, jumping 31 US cents or 4.5 per cent to US$7.14. Singtel rose six cents or 1.5 per cent to $3.97.

    Outside of the blue chips, investment company ISR Capital, known formerly as Asiasons WFG Financial, soared a whopping 10.8 cents or 71.1 per cent to 26 cents.

    ISR, which was queried by the Singapore Exchange (SGX) last week, said the company, as announced earlier during the month, is in discussions about a potential project management and financing arrangement on a rare earth project in Madagascar.

    It told the SGX that the talks "do not warrant an announcement as yet as it is still in a preliminary state".

    Notably, LionGold and Blumont - named as those responsible for the penny stock crash in October 2013 together with the then-Asiasons - each rocketed by 100 per cent in high volumes.

    Noble Group was the day's most heavily traded, jumping 1.2 cents or 9.4 per cent to 13.9 cents on 188.2 million shares done.

    A total of 1.48 billion shares worth $748.4 million exchanged hands across the bourse.