Jul 30, 2014

    STI resumes rise after holiday

    SINGAPORE shares resumed their recent resurgence yesterday after the Hari Raya holiday, as regional markets powered ahead.

    The benchmark Straits Times Index (STI) inched up 5.91 points, or 0.2 per cent, to 3,356.08, hitting a fresh 14-month peak.

    But volumes remained fairly muted, with just 1.4 billion shares worth $909.5 million changing hands.

    A broker said: "There were some penny stocks in play, but it was mostly a slow session."

    Dealers said investors had one eye on the much-watched United States Federal Reserve meeting, which began yesterday and ends today, and also on Friday's US non-farms payroll.

    Overnight, Wall Street was little changed as traders grappled with the risk of simmering tensions in the Middle East and eastern Europe.

    "Add in a Goldman Sachs report last week highlighting that equities are at risk of a selloff, and we have investors content to monitor from the sidelines," said CMC Markets analyst Desmond Chua.

    Regional bourses were largely in positive territory, with Japan 0.57 per cent in front, Hong Kong 0.87 per cent ahead and Shanghai 0.24 per cent higher.

    Here, 11 of the 30 STI component counters closed higher, with 12 losers and seven unchanged.

    All three bank stocks finished in front, with United Overseas Bank 30 cents up at $23.98, DBS Group Holdings a cent higher at $18.03 and OCBC Bank adding two cents to $9.76.

    Other blue chips also gained ground, with SingTel gaining two cents to $4, Keppel Corp rising five cents to $11.05 and Singapore Exchange inching up three cents to $7.14.

    Indofood Agri Resources was in the spotlight after posting second-quarter earnings yesterday. It closed 0.5 cent higher at 98.5 cents.

    CIMB noted: "We feel that its current valuation has fully reflected the improving earnings prospects of the group. We may turn more positive if the group successfully scoops up significant earnings-accretive acquisitions."

    The day's most active stock was Adventus Holdings, which moved 0.8 cent up to 4.5 cents, with 76.1 million shares traded.

    Overall, analysts warn of a near-term pullback, but are still bullish on stocks in the coming months.

    Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said: "Shares remain vulnerable to a short-term correction, with a potential Fed rates scare at some point being the most likely trigger."