Jun 04, 2014

    Local stocks dip as regional bourses rise

    SINGAPORE shares slipped slightly yesterday amid a mainly upbeat regional market as investors here zoomed in on selected counters.

    The benchmark Straits Times Index (STI) closed 5.57 points, or 0.17 per cent, down at 3,296.67. About 1.5 billion shares worth $1.2 billion changed hands.

    "It's good to see that there's some life in the market," said a broker. "Investors are still very selective, looking for stocks with some sort of story and we are seeing keen interest in such plays."

    UOB Kay Hian noted yesterday in a technicals report that the STI looks poised to break out of its recent consolidation level of 3,215 to 3,300 points.

    The broker added: "Should the index continue to trade at above 3,300, we will watch to see if the index could continue to trade higher towards 3,360, and then 3,400."

    Sentiment among the STI's regional peers was mostly brighter yesterday, with Japan up 0.66 per cent, Hong Kong 0.91 per cent higher and South Korea 0.33 per cent in front.

    ComfortDelGro hit a fresh seven-year high, closing seven cents up at $2.40 as investors kept up the recent buzz following the Government's restructuring of the transport sector announced two weeks ago.

    Noble Group shares rose 3.2 per cent to hit their highest level since February 2012, before closing 2.5 cents up at $1.425.

    Also in the spotlight was HanKore Environment Tech, after it inked a reverse takeover (RTO) deal that will beef it up with wastewater treatment assets from China Everbright Water Investments. HanKore closed eight cents lower at $1.11.

    DMG said the merger paves the way for "M&A-driven growth", adding that the purchase price was higher than expected but was still within the range of recent M&A transactions.

    The day's most active counter was W Corporation, which jumped 0.6 cent to 7.2 cents with 96.4 million units traded.

    W Corp received in-principle approval from the exchange for its proposed $490.9 million acquisition of YuuZoo Corporation, one of the world's leading targeted e-commerce social networking platforms, which would result in an RTO of W Corp.

    Overall, analysts remain upbeat on stocks despite cautioning that they remain vulnerable to a mid-year correction.

    "With shares having been in a bit of a stealth correction all year, any pullback may well be mild and, in any case, the broad trend in shares is expected to remain up," said Mr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors. "So any dip should be seen as a buying opportunity."