Jan 14, 2016

    STI rebounds slightly, mood still cautious

    SINGAPORE shares finally stopped their bleeding yesterday with sentiment looking to be on the mend after a violent sell-off.

    The benchmark Straits Times Index rose a marginal 4.72 points or 0.18 per cent to 2,696.50, closing up for only the second time so far this year.

    The market was hardly boisterous but around 1.09 billion shares worth $998.8 million were still transacted.

    Most Asian markets were also up, with Tokyo putting on 2.88 per cent while Hong Kong added 1.13 per cent.

    Sydney gained 1.19 per cent and Kuala Lumpur ended 0.07 per cent higher.

    But Shanghai shed 2.42 per cent after an afternoon sell-off wiped out a positive start.

    Where the markets will go in the near term is still anyone's guess, Fidelity chief investment officer for equities Dominic Rossi cautioned.

    "The next earnings cycle in the United States will come in about two weeks' time, and that'll be a big test for the global markets.

    "But overall sentiment is certainly quite fragile.

    "All it takes is another yuan rate reduction, and we'll be back in the slide," he told The Straits Times yesterday.

    Singapore companies are also entering their results season, with construction firm Lian Beng Group reporting a 55.4 per cent increase in revenue for the six months to Nov 30 due to higher contribution from residential property joint ventures.

    Its shares ended flat at 49.5 cents ahead of yesterday's announcement.

    Gains were made by 17 STI counters. SingTel closed up five cents or 1.42 per cent to $3.58, with 23.5 million shares changing hands. Thai Beverage was also up, rising one cent or 1.48 per cent to 68.5 cents.

    Keppel Corp was also among the gainers, up four cents or 0.78 per cent to $5.19. But the counter will likely head down again as crude oil prices show no robust sign of recovery.

    It remains uncertain how the oil prices will move in the coming months, OCBC economist Barnabas Gan said.

    "The biggest wild card will be the resilience of oversupplies into 2016.

    "The production in the Middle East will likely remain strong while the lifting of the oil-export ban in the US injects further suspense for oil supplies into 2016.

    "Indeed, time is the key storyteller on how prices will react based on this kaleidoscope of factors," he said in a note yesterday.

    Other offshore and marine plays were down. Sembcorp Marine dropped four cents or 2.65 per cent to $1.47 while Ezra Holdings pared 0.1 cent or 1.27 per cent to 7.8 cents.

    Investors hunting for small and mid-cap plays showed their preference for Jumbo Group.

    The seafood-restaurant operator has gained around 20 per cent over the past month as the rest of the market languished. It rose three cents or 7.06 per cent to 45.5 cents yesterday.