STI ends on merrier note, up 14.71 points

Investors took a pause this festive season, not uncommon in December, particularly when the past year is replete with political uncertainty and the continued loss of various icons.

Even so, the benchmark Straits Times Index (STI) ended yesterday's session - the first trading day after Christmas - 14.71 points or 0.51 per cent higher at 2,885.76, led by a rally in banking stocks.

Still, investors away on holiday meant that turnover was a thin 601.1 million units worth $363.5 million, a far cry from the $1.3 billion average seen since Mr Donald Trump won the US presidential election.

Excluding warrants, there were 188 rises versus 174 falls.

Although the post-Trump rally seems to have fizzled over the past six weeks, US stocks kept the holiday spirit alive on almost 1 per cent yesterday, more than recovering Monday's losses.

China's Shanghai Composite dipped 0.25 per cent despite positive data, while Hong Kong's Hang Seng index reopens for trading today.

IG market strategist Pan Jingyi said: "Once again, it is the time of the year when markets trade with hushed tones.

"Most markets will return on Tuesday from the Christmas holidays, though they are likely to remain in this year-end slumber."

She noted "the magnitude of moves could remain capped" with trading expected to remain thin.

On a merrier note, oil prices gained yesterday following news that there would be output cuts by both Opec and non-Opec producers, set to start in less than a week.

Correspondingly, counters of Ezra Holdings, Rex International and Ezion Holdings were active and all ended the day in the green, save for KrisEnergy.

STI's gains yesterday were led by the three banks, with OCBC Bank the biggest gainer, up $0.08 to end the day at $9.01.

DBS Bank added $0.05 to close at $17.44, while United Overseas Bank rose five cents to finish at $20.40.

COUNTERS

Singtel was among the most active counters despite the thin trade, rising $0.02 to $3.67 with nearly 9.3 million shares changing hands.

With 26.3 million units traded, shares of Spackman Entertainment Group were among the most active stocks, inching up $0.002 to $0.192, buoyed by its recent box office hit.

"Over the holidays, Master has been a big hit, accumulating over three million ticket sales and capturing over 55 per cent of Korea's ticket revenue share just over four days of its release, affirming its status as a blockbuster," said analyst Jarick Seet of RHB Research Institute Singapore, who maintained the "buy" call on the stock, adding the target price is now $0.32, up from $0.22 predated Spackman's credentials as a movie producer.

On the broader investment outlook for the first quarter of 2017, Mr Lim Say Boon, chief investment officer at DBS Bank, wrote the "Trump Trade" - bullish dollar and developed market equities but bearish bonds and emerging markets or Asia excluding-Japan equities and currencies - would likely pause until the inauguration of Mr Trump next month.

So "Trump Trade" would likely resume, taking US equities even higher, said Mr Lim, adding that European equities would join the developed market stock rally, helped by continued quantitative easing by the European Central Bank and a stronger dollar.

He said: "Japanese stocks will likely continue higher, along with a stronger US and Japan currency.

"But emerging markets or Asia excluding Japan equities will tread water until there is greater clarity on how the Trump administration proceeds with its protectionist agenda."

In the meantime, Mr Lim warned investors to be nimble as there would come a point when the consequent higher rates would kill the market for already expensive risk assets.

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