Dec 03, 2013

    STI edges up amid mixed signals

    The Straits Times

    SINGAPORE shares eked out some gains amid a muted trading session yesterday, after bright China manufacturing data outweighed worries of weak United States holiday-season retail sales.

    The benchmark Straits Times Index added 12.41 points, or 0.39 per cent, to 3,188.76, though only 1.45 billion shares worth $615 million changed hands.

    Investors here and in the region were cheered by China's manufacturing purchasing managers' index, which matched the 18-month high reached in October and outdid expectations.

    "This first barometer...indicates the economy continues to expand at a solid pace," noted Citi Research. "However, forward-looking sub-indices continued to weaken and will likely weigh on investment and growth momentum going forward."

    Traders still trod cautiously after expectations of a downbeat festive-shopping season sparked some bearish sentiment.

    The mixed data sent key regional markets mostly lower, with Japan down 0.04 per cent, Shanghai 0.59 per cent back and South Korea 0.69 per cent weaker, though Hong Kong rose 0.66 per cent.

    Back home, 18 of the 30 STI component stocks closed higher, with 10 losers and two unchanged. The gainers included Genting Singapore, which put on four cents to $1.51 after CIMB upgraded the stock from "underperform" to "outperform".

    CIMB noted: "Resorts World Sentosa's earnings have bottomed this year, and we believe that it will stage a strong recovery in the fourth quarter and first quarter of next year."

    Wilmar International also enjoyed a bright outing, adding four cents to $3.56, while fellow palm-oil player Golden Agri-Resources rose a cent to 58.5 cents.

    Oil-rig builder Keppel Corp edged up two cents to $11.33 and SembCorp Marine dropped four cents to $4.40.

    OCBC Investment Research noted on the sector: "We believe that it has strong long-term fundamentals, as countries have an interest in fulfilling as much domestic demand as possible in order to boost energy security."

    The week's main market event will be Friday's US payrolls data, which could signal how soon the Federal Reserve will trim its massive monetary stimulus.

    "It will likely be important in determining whether the Fed will start to taper at its December meeting," said Mr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors.

    He added that the consensus is for a 185,000 gain in job numbers, with the probability of a December taper to rise significantly if it hits 200,000 or above.