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STI finding support at 3,200

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US action on foreign telco equipment sends tech counters down

Volatility remains the mantra as regional markets continued to ebb and flow yesterday, contributing to a mixed session.

But the Singapore market managed to trend upwards after opening lower following Washington's move to ban US companies from using foreign telecom equipment.

Entering the mid-day break flat, the Straits Times Index (STI) continued to reverse the early session's dip to close up 11.49 points or 0.4 per cent at 3,230.26.

On the benchmark index's performance, CMC Markets market analyst Margaret Yang, said: "The STI has found some support at around 3,200, but I don't think the worst is over if trade-risk persists for an extended period of time."

The US' latest move, which market watchers see as targeting Huawei Technologies, adds another element to the already tense trade relations between Washington and Beijing.

"If that is not an escalation in trade tensions, then I don't know what is," said Oanda senior market analyst Jeffrey Halley.

While the spillover effect was not as pronounced in the local market, most tech counters closed lower. AEM Holdings, one of the firms selected by Huawei for testing and developing cabling links for the latter's 5G backhaul network, closed two cents or 2 per cent down at $0.97.

"AEM's biggest client - US tech player Intel - is also one of Huawei's suppliers, so it could have also impacted the Singapore-listed firm's performance," a dealer told The Business Times.

Hi-P International closed one cent or 0.8 per cent down at $1.29, and Venture Corp fell $0.14 or 0.9 per cent to $15.76.

The defensively positioned Netlink NBN Trust, which has a significant domestic market share in fibre network infrastructure, closed 0.5 cent or 0.6 per cent up at $0.84.

Trading volume on the Singapore bourse clocked in at 968.09 million securities or 77 per cent of the daily average in the first four months of this year.

Meanwhile, total turnover came to $883.59 million, 86 per cent of the January-to-April daily average.

Across the market, decliners outnumbered advancers 205 to 181. The benchmark index had 21 of its 30 components trading in the black.

With 39.2 million shares changing hands, Yangzijiang Shipbuilding was the Singapore bourse's most traded stock, closing three cents or 2.1 per cent higher at $1.49.

Market watchers speculated that the shipbuilder's stock could have gone up on possible share buybacks and traders looking to add to their positions before Yangzijiang goes ex-dividend on May 21.

Wilmar International was another of the STI's big gainers, closing five cents or 1.4 per cent higher at $3.55. Yesterday, a RHB Research Institute report reaffirmed the agri-business player as its top sector pick.

BoardRoom Limited shares leapt yesterday, after news on Wednesday that GK Goh Holdings has made a voluntary unconditional cash offer for the corporate secretarial services firm at $0.88 per share.

BoardRoom, which GK Goh intends to delist, closed at the offer price of $0.88, up $0.11 or 14.3 per cent.

The offer to take BoardRoom private, follows a separate offer for Memtech International, and tops off two straight days of bids to delist Singapore-listed companies.

Among regional markets, Australia and China were higher. Japan, Malaysia and South Korea were lower, while Hong Kong closed flat.

IG market strategist Pan Jingyi said of the performance of the Chinese market: "The greater the blow-up of trade tensions, the greater the expectation of further policy support held by the market, which induced the gains seen on Thursday."

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