Traders wary of Fed meet, Crimea vote
SINGAPORE shares rose slightly in cautious trading yesterday, with the benchmark Straits Times Index (STI) adding 0.6 per cent to 3,092.14 points. About 1.6 billion shares worth $864 million changed hands.
Dealers said traders were not in the mood to take large punts ahead of a United States Federal Reserve meeting starting today, while casting a worried glance at continuing tensions in Ukraine.
CMC Markets analyst Kenny Kan said: "Investors are waiting for the Federal Open Market Committee's latest policy decisions this week."
Analysts widely expect the Fed to announce another US$10 billion (S$12.7 billion) cut to its bond-buying stimulus on Thursday, bringing its monthly bond purchases down to US$55 billion.
Western nations questioned Crimea's vote to rejoin Russia, with the European Union, US and the Ukrainian government deeming the vote illegal.
Regional markets were mixed, with Japan 0.35 per cent behind and Hong Kong off by 0.30 per cent, but Shanghai rose 0.96 per cent and South Korea ended 0.40 per cent in front.
Back home, 22 of the 30 STI component stocks were up, with seven lower and one unchanged.
All three bank counters ended higher, with DBS Group Holdings gaining 18 cents to $15.91, United Overseas Bank adding 10 cents to $20 and OCBC Bank rising three cents to $9.35.
Maybank Kim Eng said Singapore banks' significantly higher exposure to China since 2008 has sparked fears of potential pitfalls.
But it added: "We think the concerns are overdone because the banks have limited domestic lending in China and the key growth driver has been the safer short-term trade loans."
Commodity plays were in the spotlight following a Temasek unit's takeover bid for Olam International on Friday, with Wilmar International adding six cents to $3.45 and Golden Agri-Resources up a cent to 59.5 cents.
But Olam slipped two cents to $2.21 from the $2.23 takeover price.
Sharp price swings in Swissco and TT International shares triggered queries from Singapore Exchange and prompted "trade with caution" statements.
Both said they were not aware of any reasons that could explain the unusual trading.
Swissco sank 17.9 per cent to 32 cents with 27.2 million shares traded, while TT International surged 8.7 per cent to 17.5 cents with 59.7 million units done.
Overall, market experts warn of more near-term turbulence.
Mr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said investors should allow for the likelihood of a "10 to 15 per cent correction" at some point this year and more constrained returns than those seen over the last two years.
But he added: "The broad trend in share markets is likely to remain up."