STI climbs 1.12% on improving sentiment, Latest Business News - The New Paper

STI climbs 1.12% on improving sentiment

This article is more than 12 months old

S'pore stocks extend gains to 4th straight session; markets rise across Asia, reflecting investors' hopes about US-China talks

Singapore stocks extended gains to a fourth straight session yesterday as US-China trade negotiations concluded after three days. Markets also gained across Asia, reflecting investors' hopes for positive results from the talks.

The Straits Times Index (STI) climbed 1.12 per cent or 35.13 points to 3,158.07. Advancers outpaced decliners 250 to 144 as 1.6 billion shares worth $1.12 billion changed hands.

Some analysts believe sentiment is improving.

Mr Lukman Otunuga, research analyst at FXTM, said: "A sense of optimism over trade talks between the US and China ending on a positive note is clearly supporting global risk sentiment and this continues to be reflected on global equities.

"Although a breakthrough deal between both sides seems premature, any encouraging signs of cooperation and prospects of talks leading to more higher-level negotiations will be a welcome development for financial markets."

US President Donald Trump's anticipated prime-time Oval Office address on the border wall and government shutdown also kept largely to script, and appeared to be shrugged off by Asian investors choosing to remain focused on ongoing trade developments, adds Mr Otunuga.

In Singapore, the Straits Times Index has broken out above the 3,100 resistance level and CMC analyst Margaret Yang thinks the index is "attempting to reach higher highs". She expects the next resistance level to be found at levels around 3,200.

Thanks to the trade talks, cyclical sectors such as technology, electronics, industrial and consumer ones are having a vivid rally, said Ms Yang.

The index's top gainers yesterday included Venture Corp, which went up 4.55 per cent to $14.92. Conglomerate Jardine Matheson Holdings also gained 1.9 per cent to US$69.17, while Jardine Cycle & Carriage rose 2.6 per cent after lunchtime before closing 0.5 per cent higher at $36.27.

Among consumer stocks, grocery and supermarket retailer Sheng Shiong put on 0.91 per cent to $1.11, while chocolate confectionery company Delfi gained 0.73 per cent to $1.38.

RHB Research Institute analyst Juliana Cai remains overweight on the consumer sector and believes the sector will outperform the STI against a backdrop of a global economic slowdown and an uncertain trade outlook between the US and China.

In a Jan 4 report, she cited Sheng Shiong, and "under-researched" Delfi and Genting Singapore as top picks for 2019.

Offshore and marine (O&M) and banking sectors may also see better sentiment as oil prices regain strength, said Ms Yang.

Keppel Corp rose 0.33 per cent to $6.18 yesterday, while Sembcorp Marine closed unchanged at $1.62.

But the banking sector may be one to watch, after news emerged of Coastal Oil Singapore, a crude oil products supplier filing for liquidation.

This hits at least 10 banks, including all three Singapore banks, which are owed about half of the total debt of US$354 million (S$479m).

When contacted, DBS and OCBC declined to comment. Earlier this month, DBS Singapore seized two vessels belonging to Coastal.

The Business Times understands that Coastal Oil Singapore is scheduled to hold a creditors' meeting today to determine a change of liquidators, among other business.

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