Dec 30, 2014

    STI rises amid miserly turnover

    SINGAPORE shares may have kept up the Santa rally yesterday, but the Grinch made his presence felt in terms of miserly turnover.

    Friday's record close on United States stock markets and a surge in China shares helped drive the Straits Times Index (STI) 14.01 points higher to 3,367.69 yesterday.

    But a mere 873.3 million shares worth $542.6 million changed hands yesterday.

    "Trading is likely to stay quiet for this week until after the new year," remisier Desmond Leong said.

    Both the S&P 500 and the Dow Jones Industrial Average are at record highs, following their biggest rally in three years after third-quarter US growth came in at 5 per cent, its fastest pace since 2003.

    "There is still lots of good, solid fundamental news coming out of the US," said Mark Lister, head of private wealth research at Craigs Investment Partners. "Equities are still the asset class of choice. It looks like the rally will continue into the end of the year."

    Stan Shamu, Melbourne-based market strategist at IG Markets, said: "Asian equities are off to a great start to the week, with investors growing increasingly optimistic about China deploying stimulus."

    The most active local stock was Memstar Technology, which jumped 5 per cent or 0.1 cent to 2.1 cent, with more than 70 million shares traded. The membrane manufacturer has proposed to acquire all of Longmen Group for US$420 million (S$555 million) in an all-share deal.

    If the deal goes through, it will constitute a reverse takeover. Longmen will own 73.1 per cent of Memstar, marking a backdoor listing for the natural gas developer.

    Longmen is mainly engaged in the exploration, development, production and sale of coal bed methane resources in Shaanxi, China.

    "But it's a speculation play because the fundamentals haven't gone in yet," Mr Leong said.

    Shares of Pacific Andes Resources Development fell 5.4 per cent or 0.3 cent to 5.3 cents, with eight million shares traded. The global frozen fish supplier said it plans to undertake a fully underwritten rights issue of more than 3.83 billion shares at an issue price of 5.1 cents for each rights share. Four rights shares will be on offer for every five existing ordinary shares. The exercise will raise $195.5 million.

    Meanwhile, news of the disappearance of an AirAsia aircraft en route from Indonesia to Singapore didn't make much of a ripple in the local market, traders said.

    Shares of AirAsia in Kuala Lumpur tumbled the most in three years, sliding as much as 13 per cent to RM2.56 (97 Singapore cents) before closing 8.5 per cent lower yesterday.

    Here, Singapore Airlines dipped 0.7 per cent or eight Singapore cents to $11.59, with a mere 580,000 shares traded.