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Banks give STI boost

This article is more than 12 months old

Index surges by 1.5 per cent to close above 3,400 for the first time this year

Led by DBS Group Holdings, the local banks garnered the most attention yesterday, all ending at 2019 highs.

Their collective performance during the trading session saw the Straits Times Index (STI) finish at 3,407.02, up 50.07 points or 1.5 per cent.

This is the first time that the benchmark index has closed above 3,400 this year. Buoyed by a 9 per cent increase in first-quarter profit to $1.65 billion, DBS closed 99 cents or 3.6 per cent higher at $28.40.

The bank also changed its dividend payout frequency from semi-annually to quarterly.

"It was a really good set of results, and changing to a quarterly dividend payout helps to lessen volatility of DBS's share price," KGI Securities' head of research Joel Ng remarked.

IG market strategist Pan Jingyi observed: "For the most part, the better-than-expected earnings from Singapore's largest bank can be seen carrying the market."

She added that DBS' performance also fuelled investors' hopes that "it would be similar for the remaining two banks".

This played a role in OCBC Bank finishing 31 cents or 2.6 per cent higher at $12.12 and United Overseas Bank adding 69 cents or 2.5 per cent higher to close at $27.97.

"The other banks have been laggards compared with DBS over the past one month, and are just catching up," Mr Ng said.

With the banking trio making up 40 per cent of the weighting, the Singapore market - like others in the region - were also given a lift by strong US first-quarter economic growth and data which showed that profits at Chinese industrial firms grew for the first time in four months.

Elsewhere in Asia, South Korea and Hong Kong closed higher, while Australia, China and Malaysia ended lower.

Japan markets will remain closed before trading resumes on May 7.

In Singapore, trading clocked in at 1.05 billion securities, 83 per cent of the daily average over the first three months of the year.


Total turnover came to $1.23 billion, 20 per cent higher than the January-to-March daily average.

Across the market, advancers outpaced decliners 218 to 171.

In comparison, 25 of the STI's 30 components ended in the black.

Among them, Genting Singapore was the blue-chip index's most traded.

The casino operator closed 1.5 cents or 1.6 per cent up at 98.5 cents with 68.2 million shares changing hands.

Food and beverage player Thai Beverage continued to trend upwards on sales improvements.

Yesterday, its shares closed 1.5 cents or 1.8 per cent higher at 83.5 cents.

Mr Brandon Leu, vice-president of equities and financial products at UOB Kay Hian, noted that investors were mostly focused on banking and electronics sector stocks when US-China trade talks first showed signs of improving, and have recently turned to counters like ThaiBev.

Bucking the trend among STI components was Keppel Corp, which shed 16 cents or 2.3 per cent to end at $6.79.

Market watchers noted that shares in the conglomerate were trading ex-dividend yesterday, and were also impacted by the decline in oil prices following a recent run-up.

Among non-STI counters, No Signboard Holdings dropped 0.7 cent or 8.3 per cent to 7.7 cents, its lowest closing price since listing on the Singapore Exchange's Catalist board in November 2017.

The restaurant operator's shares resumed trading yesterday following a trading halt on April 24.

Before the market opened, the company said the Singapore Police Force's Commercial Affairs Department had launched an investigation over a recent share buyback.

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