Turnover up as Suntec Reit joins SiMSCI
TURNOVER on the local bourse jumped yesterday on positive leads from Europe and China, as fund managers rushed to rebalance their portfolios due to a change in the MSCI Singapore Index (SiMSCI).
The benchmark Straits Times Index gained 4.46 points to 3,344.99, with 1.75 billion shares worth $1.79 billion changing hands. The average daily turnover for the first 10 months this year was $1.06 billion.
Expectations that Europe's central bank may broaden its asset buying programme and that China's central bank may further cut interest rates to shore up economic growth helped fuel positive sentiment.
But what sparked the jump in turnover was a report on Suntec Reit replacing Olam International in the SiMSCI, an alternative benchmark to the STI for tracking the local market.
That sent Suntec Reit up 1.6 per cent or three cents to $1.94 yesterday, with a whopping 180.2 million shares changing hands.
"A lot of exchange-traded funds (ETFs) track the SiMSCI. Global and local fund managers managing ETFs that track the SiMSCI were rushing to sell Olam and buy Suntec Reit for their portfolio due to the change," remisier Alvin Yong said. Olam shares shed 2.3 per cent or five cents to $2.15, with nearly 40 million shares changing hands.
Other top volume stocks included Pacific Andes Resources Development, which plunged nearly 26 per cent or 2.8 cents to eight cents, with 57.8 million shares changing hands.
The global frozen-fish supplier said yesterday it plans to undertake a rights issue of more than 3.83 billion new ordinary shares at an issue price of 5.1 cents for each rights share. The exercise will raise $195.5 million.
"There is massive dilution in this counter as shareholders are complaining about the financial management of the company," Mr Yong said. "And they are questioning why the company keeps calling for rights issues so often."
Meanwhile, low crude prices are expected to help lower freight costs for Singapore Airlines (SIA), which gained 0.8 per cent or eight cents to $10.45. Oil prices fell ahead of a key meeting later this week of the Organisation of the Petroleum Exporting Countries (Opec), as traders began betting that Opec would not cut supply to stem a plunge in oil prices.
Golden Agri-Resources, another heavily traded stock, was flat at 45.5 cents with 86.6 million shares traded. The world's second-largest palm oil firm is "a victim of weak palm oil prices", Mr Yong said.