STI rises on strong China data
SINGAPORE shares bucked the downtrend afflicting most of the region yesterday, ending a shade higher thanks in part to an unexpectedly strong Chinese manufacturing report.
The key Straits Times Index rose 1.52 points to 3,298.09, with 1.29 billion shares worth $852.1 million changing hands.
HSBC said a preliminary reading for its purchasing managers' index of manufacturing activity in China came in at 50.5, up from 50.2 last month. A reading above 50 indicates growth.
The figures surprised analysts who had been bracing themselves for a sub- 50 reading after a recent weak batch of output and trade data.
But regional bourses - apart from Shanghai, which gained 0.9 per cent - got little mileage from the Chinese manufacturing data. Hong Kong lost 0.5 per cent; South Korea shed 0.5 per cent; India slid 0.9 per cent and Taiwan fell 0.5 per cent. Tokyo was closed for a public holiday.
Among the top volume stocks was Genting Hong Kong, which jumped 2.6 per cent, or one US cent, to 40 US cents, with 72.5 million shares changing hands.
Genting Singapore jumped 3.6 per cent, or four cents, to $1.15, with 45.1 million shares changing hands, after Morgan Stanley Research Asia-Pacific upgraded the blue-chip counter to "overweight" from "equal weight".
Praveen Choudhary, an analyst with Morgan Stanley, said in a note yesterday that Genting Singapore's operation "generates healthy cashflow of $1 billion per annum, and earnings revisions may have bottomed".
"Upcoming catalysts, including Japan's move to legalise casinos in the fourth quarter, a potential ground-breaking for Jeju resort in the first half of next year and the opening of Jurong Hotel in mid-2015, should drive stock outperformance," he said.
Another heavily traded stock, Sinjia Land, plunged 12.8 per cent or three cents to 20.5 cents with 49.7 million shares changing hands, after it was queried by the Singapore Exchange on "unusual volume movements" in its share-trading activity yesterday.
Also buoying local shares was an SGX MyGateway report, which said the STI has generated a year-to-date total return of 7.2 per cent. This total return is made up of price performance in addition to re-invested dividends.
The return on equity for the STI is 10.2 per cent over the past 12 months. This means for every dollar of a common share invested in the constituents of the STI, the financial return was 10.2 per cent.
Put another way, a basket of 30 appropriately weighted STI stocks would have generated just over 10 cents of net income for every dollar invested, it said.