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Mid-week index surge was main highlight

This article is more than 12 months old

STI closes at 3,240.01, helped by gains in the banks, Singtel and Jardine Matheson

Other than the mid-week burst of window-dressing that came on the last day of May, Wall Street's all-time high on Thursday and the new word "covfefe" that was invented by US President Donald Trump, there were not that many features of interest in this week's trading.

Predictably, it was the banks, Singtel and the Jardine group which benefited most from the push that helped the Straits Times Index gain 32 points on Wednesday and Thursday.

Yesterday, the index drifted for most of the session but managed to add 4.05 points at the close at 3,240.01, bringing its gain for the week to 21 points or 0.65 per cent.

A look at the turnover figures is revealing - Monday's and Tuesday's dollar values were $669.4 million and $613 million respectively, on Wednesday $2 billion was done, on Thursday this had dropped sharply to $1.3 billion, and yesterday 1.9 billion units worth only $1 billion were traded.

It has to be pointed out though that Wall Street was closed on Monday for Memorial Day, and Hong Kong and the China markets were closed on Tuesday for the Dragon Boat Festival.

Still, the fact that turnover more than tripled on Wednesday compared to the day before, then dropped off by 50 per cent two days later, clearly suggests that some form of month-end rigging occurred.

Moreover, the same volume jump has occurred in most other months, the most notable being in February when volume done on the 27th was $1.15 billion versus $2.7 billion on the 28th.

"Turnover more than tripled on Wednesday from the day before, then dropped off by 50 per cent two days later."

Whatever the case, second line activity here was predictably focused on low priced issues, though there were sporadic bursts that caught the market's imagination.

For example, semiconductor firm Ellipsiz jumped almost 10 per cent on Tuesday and was queried by the Singapore Exchange. Ellipsiz replied that it has recently entered into a "non-binding letter of intent with a third party to explore further such an opportunity concerning certain assets" of the company. It also cautioned that the letter of intent does not create any legal binding obligation to proceed with any deal.

Loyz Energy on Thursday took the proactive step of making an announcement when volume swelled in its shares, saying that it regularly reviews strategic options and discusses possible mergers and acquisitions, though no conclusive deals have yet to be reached.

On the external front, much was made of Mr Trump's mid-week tweet that included the new, unknown word "covfefe", which has led to much head-scratching around the world.

Many observers have since offered their interpretation, ranging from the sublime to the ridiculous.

Among the former is Rabobank's, which is that the new adjective means "arrogantly proceeding with an action even when its actual effects are almost entirely opposite to those that one wishes to achieve".

To illustrate, Rabobank said that after reading the US Federal Reserve's last Beige Book, it looks very much like the central bank will raise interest rates again in June and even think about running down its balance sheet, despite low core inflation. "Does one buy USD on the back of such covfefe policy?" asked Rabobank.

This article appears in The Business Times today. For full listings of SGX prices, go to btd.sg/BTmkts