Jul 19, 2016

    Trading mixed but risk sentiment has 'improved'

    LOCAL shares ended yesterday's volatile session with a marginal gain while Asian markets had a mixed day.

    But global sentiment remains somewhat positive, analysts said, with investors encouraged by the near-term certainty around Brexit's impact and potentially dovish monetary policies.

    The benchmark Straits Times Index rose 3.41 points or 0.12 per cent to 2,928.76, despite some slippage through the day with the index dropping

    to 2,923 at one point. Across the market,

    $1.04 billion worth of shares were traded.

    After rising about 7.1 per cent since the Brexit sell-off on June 24, the STI is drawing near to its high point

    for the year of around 2,960 hit in late April.

    Risk sentiment has improved on the perceived stability around Brexit, CMC Markets analyst Margaret Yang said.

    "Investors liked the fact that a new British Prime Minister (Theresa May) has quickly come in, and she made clear that her government is in no rush to trigger Article 50," she added, referring to the European Union mechanism for a member country's exit.

    "The market is also discounting the impact of (Federal Reserve) rate hikes, with the general consensus that there will be only one hike

    by the end of this year, while more central bank easing is also widely expected."

    Hopes of a Bank of Japan rate cut have been part of the boost. Tokyo was closed yesterday for a public holiday but the Nikkei 225 had put on about 9 per cent over the last week. Hong Kong was up 0.67 per cent yesterday, and Sydney closed ahead 0.53 per cent but Shanghai pared 0.35 per cent.

    Here, 19 of the 30 STI components ended in the black, with top performer Global Logistic Properties closing up 3.5 cents or 1.84 per cent at $1.935.

    Ascendas Real Estate Investment Trust (Reit) rose four cents or 1.64 per cent to $2.48.

    All three local banks were up, with

    United Overseas Bank adding 19 cents or 1.01 per cent to $18.93. OCBC rose seven cents or

    0.78 per cent to $9. DBS added seven cents or

    0.43 per cent to its 52-week high at $16.19.

    Other STI gainers included Golden Agri-Resources, up half a cent or 1.41 per cent to 36 cents on

    35.1 million shares transacted, making it

    one of the top actives.

    The 10 STI losers included ComfortDelGro, down 11 cents or 3.65 per cent to $2.90 and

    Sats, which dropped eight cents or 1.82 per cent

    to $4.32. SingTel was also among the losing blue chips, down four cents or 0.93 per cent to $4.24

    as investors took profit on its recent strong run.