Feb 23, 2016

    Traders hopeful while waiting for US, Euro data

    REGIONAL markets continued their rebound from last week as investors took a more optimistic stance while they wait for a string of global economic data over the coming days.

    Singapore's benchmark Straits Times Index gained a marginal 3.78 points or 0.14 per cent to 2,660.65, firming its footing after hitting several 12-month lows in the past two months.

    The overall trading volume was 1.29 billion shares worth $934.5 million. But it was still a topsy-turvy session, showing that there is a good deal of uncertainty around.

    Momentum was stronger elsewhere, with Shanghai rising 2.35 per cent and Shenzhen adding 2.04 per cent as Chinese investors welcomed the news over the weekend that the chairman of the Securities Regulatory Commission has been replaced.

    Hong Kong was up 0.93 per cent and Tokyo put on 0.9 per cent. Kuala Lumpur was the odd one out, dropping 0.02 per cent.

    These gains came ahead of announcements of the United States and Europe data this week, including US fourth-quarter growth and new home sales as well as the euro-zone inflation rate.

    While some are expecting good news, others are less confident. DBS analysts cautioned yesterday that the rallies will not last: "Global equity markets enjoyed a technical rebound after prior week's sell-off, and technical indicators suggest this rally should continue this week.

    "But this up-move will likely have a limited shelf life as the economic fundamentals and earnings outlook remain weak."

    Singapore investors will also keep an eye on further result announcements by big cap firms in the coming days.

    DBS Bank announced a 20 per cent increase in fourth-quarter net profit for the three months to Dec 31. But its shares still dropped six cents or 0.44 per cent to $13.62 as the banking system's credit quality issues remain under scrutiny.

    Genting Singapore rose 4.5 cents or 6.25 per cent to 76.5 cents after the gaming firm reported higher-than-expected core earnings last week.

    It led the 14 STI constituents that rose yesterday.

    Golden Agri-Resources, which announces its full-year results next Monday, put on one cent or 2.74 per cent to 37.5 cents while CapitaLand jumped six cents or 2.09 per cent to $2.93.

    Meanwhile, Sembcorp Marine snapped a four-day rise and dropped the most on the STI yesterday, losing six cents or 3.53 per cent to $1.64. Keppel Corp was also down, paring 13 cents or 2.43 per cent to $5.21.

    Outside the STI, Spackman Entertainment was the top active of the day, gaining 1.3 cents or 11.71 per cent to 12.4 cents on 91.1 million shares traded. Pharmaceutical firm QT Vascular rose 0.8 cents or 6.96 per cent to 12.3 cents, with 60.3 million shares traded.

    Raffles Medical Group closed eight cents or 1.92 per cent up at $4.25, after reporting a 2.4 per cent rise in 2015 net profit yesterday.

    OCBC Investment Research analyst Jodie Foo was satisfied with the earnings: "Revenue grew 9.6 per cent to $410.5 million, forming 99 per cent of our 2015 estimate.

    "The group also declared a higher dividend per share of 4.5 cents, bringing total dividends to six cents versus 5.5 cents in 2014."

    Ms Foo gave the clinic and hospital operator a buy call, with a fair value estimate of $4.59.