Nov 20, 2014

    US data gives S'pore stocks a leg up

    SINGAPORE shares bucked the regional trend yesterday to end in positive territory.

    The benchmark Straits Times Index rose 20.83 points, or 0.63 per cent, to 3,334.56.

    One factor for the optimism could be data from the United States overnight showing that wholesale prices unexpectedly increased last month, as higher costs for services and food outweighed a slump in energy.

    Investors have been keeping an eye on inflation and hiring data as indicators of when the US Federal Reserve might raise interest rates. The Fed was set to release the minutes of their Oct 28 and 29 meeting last night.

    Elsewhere in the region, however, trading was more muted. Shanghai fell 0.2 per cent, down for a fifth day, while Hong Kong slipped 0.7 per cent to extend a three-week low.

    Foreign punters used only a fifth of their 13 billion yuan ($2.76 billion) daily quota of Shanghai stocks yesterday.

    Analysts noted that it signalled weakening demand for mainland shares just two days after the launch of a widely anticipated programme that links the Hong Kong and Shanghai bourses, and for the first time allows foreigners to invest directly in mainland stocks.

    "The news of the stock connect has already been fully digested and priced in," Wu Kan, a money manager at Shanghai-based Dragon Life Insurance, told Bloomberg. "The best strategy is to wait and see."

    Genting Singapore was among the top actives here, rising 1.5 cents to $1.09 on a turnover of 56.2 million shares, as bargain hunters picked up the stock after its recent sell-off.

    The stock dropped to its lowest level in over four years last week, after posting a 21 per cent slide in its third-quarter gaming revenue.

    Golden Agri-Resources was also among the 10 most actively traded stocks, staying flat at 46 cents on 25.4 million shares traded. The commodities firm declined to its lowest level in five years last week, after reporting its worst quarterly earnings of US$4.4 million (S$5.7 million) in 11 years.

    Other commodity players were mixed. Noble Group slipped a cent to $1.205, First Resources fell half a cent to $1.96, Wilmar International gained a cent to $3.24 and Indofood Agri climbed half a cent to 77.5 cents.

    Midas lost half a cent to 29.5 cents, after posting a 19 per cent drop for the first nine months of the year amid rising interest costs.

    DMG & Partners Research has resumed coverage of the stock with a "neutral" rating. Analyst Shekhar Jaiswal said in a note yesterday that recovering order inflows could boost the firm's profits next year, but that the stock's valuation is expensive.