STI tops 3,500 mark as MAS stays its hand
LOCAL shares surged past 3,500 points for the first time in more than seven years yesterday, on hopes of more institutional funds flowing here after the central bank refrained from easing monetary policy.
The Monetary Authority of Singapore's (MAS') decision is tipped to send the Singapore dollar up in the coming weeks.
Those expectations in turn helped the benchmark Straits Times Index rally 36.69 points to 3,521.08, with 3.46 billion shares worth $1.44 billion changing hands.
"Our market is driven by institutional buying. The market was caught off guard when the MAS decided not to ease monetary policy this time, after its surprise move in January," remisier Alvin Yong said. "That signals that the Singdollar will maintain a certain level of strength in the next few months, which should be attractive for institutional funds to come back."
David Welch, head of equity sales trading at Reorient Group in Hong Kong, told Bloomberg: "This is a positioning led rally as investors are rotating out of the United States and into Asia, especially Japan and most recently Hong Kong."
Some of that liquidity has spilled into Singapore. Yesterday's gainers included the Singapore Exchange, which jumped 2.7 per cent or 23 cents to $8.63 with 10.9 million shares traded.
Investors are betting the bourse operator will report strong third-quarter results as strong Chinese stock futures volume could boost derivatives revenue, CMC Markets analyst Nicholas Teo said.
Interest in SGX's China A50 index futures has been a major factor following the launch of the Shanghai-Hong Kong Stock Connect trading link. Speculation about a possible Singapore-China Stock Connect is also underpinning SGX shares.
Other top gainers included Singtel, which jumped 2 per cent or nine cents to $4.51, with 25.9 million shares traded.
The banking counters were up as well. United Overseas Bank gained 1.5 per cent or 36 cents to $23.68, DBS Bank climbed 1.7 per cent or 34 cents to $20.74 and OCBC Bank rose nearly 1 per cent or 10 cents to $10.80.
Penny plays were among the most actively traded, with Sino Construction jumping 11 per cent or 0.9 cent to nine cents, with 173.9 million shares changing hands. Albedo soared 21 per cent or 0.3 cent to 1.7 cents, with 163.9 million shares traded.
But telco M1 shed 1.3 per cent or five cents to $3.88 after reporting first-quarter results. Noble Group, which has been accused of accounting irregularities by shortselling outfits, closed unchanged at 87.5 cents yesterday, with 34 million shares traded.