Mild gains for most Asian markets, Latest Business News - The New Paper

Mild gains for most Asian markets

This article is more than 12 months old

STI up 0.4% to close at 3,381 on positive US session, hopes of European rate cut

Asian markets traded slightly higher yesterday, in line with a US session that saw earnings beat consensus estimates.

Markets were also given a boost by Wednesday's weak manufacturing figures from the eurozone, which added to hopes of a rate cut by the European Central Bank.

Singapore's Straits Times Index (STI) followed Wednesday's mild dip with a gain of 12.82 points or 0.4 per cent to close at 3,381.26.

Elsewhere in the Asia-Pacific, markets in Australia, China, Hong Kong, Japan and Malaysia ended yesterday's session with gains.

But South Korea, which has underperformed global peers on the back of disappointing corporate earnings and a sluggish economy, bucked the trend, closing lower.

At the moment, bad news on the global economy appears to be good news to investors.

This is how Vanguard Markets managing partner Stephen Innes put it: "Investors continue to adopt the 'red herring' school of economic policy that bad financial news is good for stock markets as it leads to strong monetary policy responses. Sort of like putting a bandaid on a broken leg."

In Singapore, trading volume clocked in at 1.18 billion securities while total turnover came to $1.05 billion. Both figures are in line with their respective daily average in the first six months of 2019.

Across the broader market, advancers narrowly beat decliners 215 to 212.

The benchmark index had six of the STI's 30 components closing in the red.

Golden Agri-Resources, which added one cent or 3.3 per cent to close at 31 cents, was the benchmark index's most traded stock with 48.9 million shares changing hands.

Another Singapore-listed agri-business firm, Wilmar International, also saw active trading yesterday, closing $0.09 or 2.3 per cent up at $4.06.

Two weeks back, the agri-business player's counter saw increased interest from institutional investors, which were likely buoyed by the China Securities Regulatory Commission accepting an application by Wilmar's Chinese unit to list on the Shenzhen Stock Exchange.

In early June, the same unit established a joint venture with UK-headquartered Associated British Foods to manufacture and distribute yeast and bakery ingredients in China.

Traders noted that in the week of the above-mentioned announcements, Wilmar was among the counters where institutional investors were top net buyers and were likely to have added more positions on the stock this week.

As at yesterday's closing, Wilmar shares have added 23 per cent since June 3.

Financials were among the main gainers on the blue-chip index. DBS Group Holdings was $0.26 or 1 per cent up at $26.91, OCBC Bank edged up three cents or 0.3 per cent to end at $11.77 and United Overseas Bank finished at $26.98, up $0.18 or 0.7 per cent.

Among real estate investment trusts (Reits), Mapletree Industrial Trust units closed two cents or 0.9 per cent higher at $2.27.

It reported on Tuesday a 3.3 per cent rise in Q1 distribution per unit to 3.1 cents from three cents a year ago. Net property income for the three months ended June 30 rose 12.2 per cent to $77.9 million.

Analysts were mostly positive on the Reit's outlook. Maybank Kim Eng analyst Chua Su Tye said the brokerage favours Mapletree Industrial Trust for its "positive growth fundamentals, as DPUs are supported by recovering leasing demand and growth visibility from a more resilient portfolio following its hi-tech asset investments and US diversification."

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