Mar 25, 2014

    STI charges ahead on good - and bad - news

    LOCAL shares powered ahead to their biggest jump in more than six months, thanks to last week's gains in United States and European shares.

    Investors here also got swept up in hopes that China would have to unveil new stimulus measures after the country released weak manufacturing data.

    The Straits Times Index (STI) jumped 38.44 points or 1.25 per cent to 3,111.83 - the largest rise in a single day since Sept 9.

    This was in line with the buoyant mood in the region, with Tokyo climbing 1.8 per cent, Hong Kong rising 1.9 per cent and Shanghai advancing 0.9 per cent.

    STI gainers included Jardine Matheson Holdings, ahead by US$2.76 (S$3.51) or 4.97 per cent to US$58.28, and Hongkong Land Holdings which climbed 20 US cents or 3.26 per cent to US$6.33.

    Outside the STI, electrical products and furniture retailer Courts Asia gained one cent or 1.8 per cent to 58 cents, after Maybank Kim Eng Research upgraded the stock to "hold" from "sell".

    "The stock has underperformed since our 'sell' call in December," said Maybank Kim Eng. "But value is starting to emerge, with its credit book value almost equivalent to its market capitalisation." Maybank Kim Eng kept its target price of 60 cents on the stock.

    Tiger Airways Holdings rose half a cent or 1.2 per cent to 41 cents. It said yesterday morning that it has ordered 37 Airbus A320neo aircraft. Its existing order of nine Airbus A320 aircraft, part of a larger 2007 order, was cancelled.

    The carrier said the move allows it to optimally manage its capacity, improve cost efficiency and advance its fleet modernisation plan.

    However, OCBC Investment Research kept its "sell" rating and fair value of 38 cents on Tiger Airways, given the continued challenges the airline faces in its core markets.

    The most active stock was Albedo - at 691 million units - as it resumed trading following a halt. The stock climbed 0.2 cent or 6.7 per cent to 3.2 cents to claw back some of its losses on Wednesday, when it lost more than 40 per cent of its value.

    The plunge occurred after Malaysia's The Star newspaper reported that tycoon Danny Tan was aborting his deal to inject his Johor land assets into Albedo.

    Albedo said on Friday that Mr Tan's representatives had requested that the agreement for the deal be "mutually terminated".

    But the firm added that neither party can unilaterally terminate the agreement, and it remains valid and binding as the parties have not reached any mutual agreement to terminate it.