Singapore shares up ahead of Fed meeting
STI up 12.78 points or 0.4% to close at 3,212.96; boost comes from market expectations that US Fed will remain dovish
A quiet Singapore stock market rose slightly yesterday as investors began to turn their eyes towards the US Federal Reserve's mid-week policy meeting.
The Straits Times (STI) joined other Asian benchmarks on higher ground, adding 12.78 points or 0.4 per cent to close at 3,212.96.
Trading on the Singapore bourse clocked in at 814.84 million securities, about 58 per cent of the daily average over the first two months of 2019.
Total turnover came to $774.89 million, about 76 per cent of the January-February daily average.
Advancers and decliners were even at 198 each.
There was a tinge of optimism in the calm. A trader told The Business Times: "Sentiment remains bullish; and even though the Singapore market has lagged against its Asian counterparts, it is still poised to overperform this year."
The trader added that he is on the lookout for whether "the STI can break 3,220 in the near term and, hopefully, 3,280 thereafter".
Elsewhere in Asia, markets got a double boost from expectations that the US Federal Reserve will remain dovish and from optimism surrounding US-China trade talks.
IG market strategist Pan Jingyi noted that the previous week's miss in US inflation and industrial production figures "had only reinforced the expectation for a dovish Fed".
Fed fund futures on the CME are predicting more than a 98 per cent probability that the Fed will keep its short-term interest rate unchanged when its meeting concludes in the overnight session before Asian markets open on Thursday.
Key indices in Australia, Japan, South Korea, China, Hong Kong and Malaysia all closed yesterday's session higher.
Of the lot, the Shanghai Composite Index almost hit a 6.5-month high while the Hang Seng registered a nine-month high. Both markets rallied on news that the Chinese government will provide a lift to its slowing economy through fiscal stimulus.
Twenty-three of the STI's 30 constituents ended the day in the black. Among them, Chang beer brewer Thai Beverage Public Co was the blue-chip index's most traded.
The counter ended the session one Singapore cent or 1.2 per cent up at 82.5 cents with 21.4 million shares changing hands.
Going by the value of trades done, DBS Group Holdings' counter saw $53.38 million traded - accounting for 6.9 per cent of the bourse's total turnover - across 2.11 million shares. The bank's shares added $0.10 or 0.4 per cent to close at $25.24.
The other local banks outperformed the STI, with OCBC Bank up $0.08 or 0.7 per cent to $11.21; and United Overseas Bank up $0.14 or 0.6 per cent to $25.38.
The STI's sole tech counter, contract manufacturer Venture Corp, rode on the coattails of last Friday's robust US tech stock performance, closing $0.21 or 1.2 per cent up at $18.
Real estate fared well on expectations of a dovish Fed. UOL closed $0.13 or 2 per cent higher at $6.58 and City Developments added $0.13 or 1.5 per cent to $9.01 among the blue-chip index's top performers.
IG's Ms Pan did not find the property counters' performance surprising, "given their sensitivity towards interest rates".
Singapore-listed real estate investment trusts (Reits) continued to garner interest from investors.
The most actively traded Reit of the day was CapitaLand Commercial Trust, which closed flat at $1.98. Its units are up 13.1 per cent on the year.
While large-cap Reits continue to perform well, RHB Research Institute said in a report yesterday that it sees more value in small- and mid-cap Reits. The firm prefers industrial and hospitality Reits.
Rex International was the bourse's most active counter with 39.3 million shares traded as the counter closed 0.2 Singapore cent or 2.4 per cent lower at 8.1 cents.