STI hits seven-year high as China bourses surge
OPTIMISM over the bull run under way in Hong Kong and China sent local stocks to a multi-year high yesterday.
The benchmark Straits Times Index (STI) jumped 12.01 points to 3,484.39 - its highest closing level since October 2007.
About 3.37 billion shares worth $1.23 billion changed hands.
Expectations that the Singapore Exchange could report strong third-quarter earnings on April 22 - thanks to a robust increase in trading volumes in recent months - sent the firm's stock up 2.3 per cent or 19 cents to $8.40. About 9.24 million shares were traded.
"There are some rumours that a Singapore-China connect could be in the works," said CMC Markets analyst Nicholas Teo.
That could allow direct trading between Singapore and Shanghai's stock exchanges.
The so-called "Shanghai-Hong Kong connect" hooks up Hong Kong's stock market to its Shanghai counterpart, and allows direct trading between the two exchanges.
Remisier Alvin Yong said yesterday that the STI could hit 3,500 by the end of the month if the bull run in North Asia continues, and financial results from local companies in coming weeks meet expectations.
Unexpectedly weak Chinese export data, which is fuelling speculation of more stimulus measures, is driving the surge in Chinese markets, noted Mr Yong.
China's export sales contracted 15 per cent last month, feeding concerns about a slowing economy.
The yuan's strength was one factor behind a 19.1 per cent year-on-year decline in exports to the European Union and a 24.8 per cent drop to Japan.
Hong Kong's Hang Seng Index gained 2.7 per cent yesterday, its highest close since December 2007, on speculation that the daily quota for buying shares through the Shanghai equity connect may be lifted to 40 billion yuan (S$8.8 billion) from 10.5 billion yuan now.
The Shanghai Composite Index climbed 2.2 per cent, while Japan's Nikkei dipped 0.01 per cent and South Korea rose 0.5 per cent.
Penny plays here were the flavour of the day, with Blumont Group, CNA Group and Vallianz among the most actively traded.
Blumont jumped 33 per cent or 0.4 cent to 1.6 cents, with 99.9 million shares traded; CNA soared 50 per cent or 1.4 cents to 4.2 cents, with 97.6 million shares traded; and Vallianz gained 10 per cent or 0.7 cent to 7.7 cents, with 96.8 million shares traded.
Meanwhile, Brent crude futures were up 82 US cents at US$58.69 a barrel by 0934 GMT on Monday amid a slowdown in drilling in the United States, giving a lift to oil plays Ezion, Keppel Corp and Charisma Energy.
Ezion rose 7.3 per cent or eight cents to $1.17, with nearly 40 million shares traded.
Keppel Corp gained 2.3 per cent or 21 cents to $9.42, while Charisma Energy jumped 14 per cent or 0.4 cent to 3.2 cents, with 96 million shares traded.