May 02, 2014

    S'pore bourse boosted by UK insurer in April

    THE Singapore market was boosted last month by a sharp jump in the share price of British insurer Prudential, which maintains a thinly-traded secondary listing here.

    The 800 or so companies listed here were worth $950.69 billion on Wednesday, the last trading day of last month, up $34.81 billion, or 3.8 per cent, from $915.88 billion at the end of March.

    Gains in SingTel and DBS Group Holdings also helped to boost the value of the bourse, as did CapitaLand's offer for CapitaMalls Asia, which drove up the prices of both stocks.

    But the single largest boost came from Prudential, which has a primary listing on the London Stock Exchange and secondary listings in New York, Hong Kong and Singapore.

    With so many other markets to buy and sell Prudential stock, liquidity for the stock here is very thin, with no trades being completed on most days.

    But 1,500 shares were traded on April 24, with the last trade at US$20 (S$25).

    That was US$4.20, or 26.6 per cent, higher than the previous close of US$15.80 on April 22.

    As a result of these few trades, Prudential's market value on Wednesday was $64 billion, a rise of 24.5 per cent from the end of March.

    Prudential's rise added $12.6 billion to the local market's value, or more than one-third of the total rise.

    The insurer's shares have been doing well in London as well, thanks to strong profits as it benefits from good business in the United States and from fast-growing Asian economies.

    Prudential had listed in Singapore and Hong Kong in 2010 as it prepared for a mega-takeover of AIA Group, the Asian arm of United States insurer American International Group.

    That deal fell apart, but Prudential kept its two Asian listings.

    The insurer's gains last month meant it overtook SingTel to become the most valuable stock on the local bourse, although SingTel was no slouch either, adding 4.9 per cent over the month to $61 billion.

    DBS Group Holdings gained 4.8 per cent to $41.5 billion, while CapitaLand's value was up by 10.7 per cent to $13.7 billion and CapitaMalls Asia gained 23.5 per cent to $8.6 billion.

    The benchmark Straits Times Index climbed 76.09 points, or 2.4 per cent, last month, to Wednesday's close of 3,264.71 points.

    The mood overall was supported by hopes that China will roll out stimulus to support its economy, although turnover was marginally down on the past year's already-weak average.

    An average of $1.22 billion worth of shares changed hands every market day of the month, down from the average of $1.24 billion over the past year.

    "It wasn't buzzing, generally, the volumes were on the lower end," said remisier Desmond Leong.

    "But at least April was not a bad month.

    "March was a bad month for the penny stocks."

    The market's value has now increased for three months, after a drop in January.

    "January was a bad month. We started off with such a low base that we've been able to rally because of that," said Mr Leong.

    "But after these rises it doesn't look like a rebound any more, it looks like a rally now," the remisier added.

    The STI is up 97.28 points, or 3.07 per cent, for the year.