Apr 10, 2014

    STI up 5.8 points amid muted gains

    SINGAPORE shares rose again yesterday on strength in the region but gains were muted as traders looked for fresh signs to push the market higher.

    The Straits Times Index closed at 3,209.92 points, up 5.83 points or 0.18 per cent.

    Sentiment was bullish around the region on continued hopes of more economic stimulus in China.

    MSCI's index of Asia-Pacific shares outside Japan rose almost 1 per cent to its highest level since late October last year, while Hong Kong gained 1.1 per cent and Shanghai was up by 0.3 per cent. But Tokyo fell 2.1 per cent, with shares falling as the yen strengthened.

    The story of more stimulus on the mainland has driven the market for a while but traders are going to need more reasons to push the market higher.

    The STI has had a bumper three weeks and is up 152.72 points or 5 per cent since March 20. The run has left the index 1.3 per cent up for the year.

    But it is "still not clear where markets are headed", said NetResearch Asia in a note.

    "The major Wall Street indices closed (on Tuesday) in positive territory but, as always, it is premature to say the worst is over as the bounce was seen to be mainly technical," it added.

    The STI was driven up by Jardine Matheson Holdings, which added US$1.39 (S$1.74) or 2.3 per cent to US$62.50 yesterday.

    The commodities companies were volatile amid mixed trade. Noble Group dropped 4.5 cents or 3.5 per cent to $1.235 but Golden Agri-Resources climbed two cents or 3.4 per cent to 61 cents.

    The telcos were lower after Maybank Kim Eng Research kept its "neutral" call on the sector.

    SingTel fell one cent or 0.3 per cent to $3.65 and StarHub was behind by two cents or 0.48 per cent to $4.16. M1, which is not part of the STI, lost one cent or 0.3 per cent to $3.44.

    "The higher prices of three new major handsets launched last week confirmed our view that handset subsidies would decline this year," said Maybank Kim Eng.

    "We think there could be upside to margins from the trend towards lower subsidies."

    But Maybank Kim Eng said the Government's ruling restricting the number of prepaid SIM cards per subscriber could hit prepaid revenue.

    A person can now have only three prepaid SIM cards, down from 10 previously.

    Maybank Kim Eng has a "buy" on StarHub with a $4.98 target price, "buy" on M1 which it values at $3.86 and "hold" on SingTel, with a target price of $3.67.