Nov 11, 2014

    STI rises on positive news from China

    SINGAPORE shares made a good start to the week on the back of positive data from China and strong performances from some blue chips here.

    They all combined to lift the Straits Times Index (STI) up 14.6 points or 0.4 per cent to 3,301 - its highest close since Sept 19.

    Trading volume was just a tad below par, with about 1.37 billion shares worth $992.1 million changing hands.

    The average daily trading volume last month was 1.5 billion shares while the daily average value was around $1 billion.

    There were 184 gainers to 202 losers yesterday, while 398 stocks were unchanged.

    "The STI rose (yesterday) after China recorded a better-than-expected trade surplus over the weekend," said Phillip Futures analyst Howie Lee.

    Inflation in China was unchanged at 1.6 per cent and below the government target of 3.5 per cent, sparking hopes that more stimulus measures could be implemented.

    But Mr Lee said all-out monetary easing is unlikely from China's central bank as economic growth is not at the top of the central government's priorities now.

    News that Hong Kong and Shanghai will start a stock-trading link between both cities on Monday also lifted stocks here.

    "While it does not have a direct impact on our stocks, the news boosted investor sentiment and raised risk-taking appetite among equity investors, which contributed to the STI's gains," said Mr Lee.

    Firms with exposure to Greater China, in particular, did well.

    DBS led the charge among the banks and was one of the top gainers, gaining 31 cents to $19.65. It added 6.3 points to the STI, almost making up half the index's rise.

    United Overseas Bank gained 15 cents to $23.45 while OCBC rose seven cents to $10.20.

    Developer CapitaLand rose four cents to $3.19 after it reported a 1.3 per cent rise in net profit to $130 million after markets closed on Friday.

    OSK-DMG gave it a buy call with a target price of $3.54.

    "We see sustained demand from upgraders and first-timers for the rest of the year, bolstered by the recent relaxation of mortgage rules and easing credit in China," analyst Ivan Looi said in a note.

    Commodities firm Noble's improved performance in the third quarter helped it to rise five cents to $1.25. It was also one of the most traded stocks, with 50.5 million shares exchanged.