Apr 07, 2016

    Higher oil price pumps up sentiment

    ASIAN markets went through another mixed day yesterday with Singapore shares ending in the black.

    The volatile oil price is proving a key signal for investors but market watchers do not see a lot to cheer about.

    A recovery in Brent crude futures to over US$38 came on the back of Kuwait's assurance of an output freeze by major producers. This helped to push the benchmark Straits Times Index up 10.33 points or 0.37 per cent to 2,811.25.

    Elsewhere, markets were less even. While Hong Kong put on 0.15 per cent, Shanghai dropped 0.08 per cent and Tokyo shed 0.11 per cent. This followed the 0.75 per cent drop on Wall Street overnight as investors unsure about earnings outlook took profit on the back of the recent rally.

    A similar uncertainty is also at play here, CMC Markets analyst Margaret Yang said.

    "The gain (yesterday) was likely just a technical rebound from Tuesday due to the surge in oil prices but the prices - and the stock market - may retreat again after the weekly oil inventory report," she told The Straits Times, referring to United States oil inventory data released late last night. The stockpile level had been at record highs for seven straight weeks.

    Against this backdrop, "the STI will continue its consolidation until at least the end of this month when the release of company results paints a clearer picture", Ms Yang warned.

    Still, there was enough lift yesterday for 16 of the 30 STI constituents to end in the black.

    Keppel Corp put on 10 cents or 1.8 per cent to $5.65 and Sembcorp Marine rose 2.5 cents or 1.62 per cent to $1.565, benefiting from better oil prices.

    Outside the STI, Ezra Holdings added 0.8 cent or 8.6 per cent to 10.1 cents. It was again the top active counter, with 110.6 million shares transacted.

    Genting Singapore was one of the top STI gainers, up three cents or 3.7 per cent to 84 cents. Property counters City Developments and UOL Group also rose. CDL closed up 13 cents or 1.57 per cent at $8.43 while UOL added four cents or 0.68 per cent to $5.88.

    Meanwhile, Golden Agri-Resources was down one cent or 2.35 per cent to 41.5 cents, and the Singapore Exchange (SGX) dropped 14 cents or 1.8 per cent to $7.64.

    In an after-market announcement yesterday, the SGX said its total securities turnover value rose 13 per cent month-on-month and 9 per cent year-on-year in March, when the bourse welcomed one new Catalist listing - gold mining firm Anchor Resources, which pared 0.9 cent or 8.7 per cent to 9.5 cents yesterday.

    Ascendas Real Estate Investment Trust closed down three cents or 1.25 per cent at $2.37 but Ascendas Hospitality Trust plunged eight cents or 10.46 per cent to 68.5 cents, as news emerged that the trust manager has called off its plan to be acquired by bidders, including Blackstone Group and Gaw Capital Partners.

    Back in the offshore and marine sector, Mermaid Maritime shot up 2.9 cents or 27.1 per cent to 13.6 cents yesterday, drawing a round of query from the SGX.