STI off to positive start for October

To say Singapore equities got the fourth quarter off to a flying start might be an exaggeration, but the local market did register one of the region's best showings in yesterday's low liquidity session.

The Straits Times Index (STI) opened 0.4 per cent higher and extended those gains as the session went on to end at 3,146.03, an advance of 26.04 points or 0.8 per cent.

Other key Asia-Pacific markets mostly rose with Australia, Japan, Malaysia and South Korea posting gains.

Markets in China are closed from Oct 1 to 7 for the week-long 70th anniversary celebrations. Hong Kong was also closed but will resume trading today.

Oanda Asia Pacific senior market analyst Jeffrey Halley noted that barring contentious tweets from US President Donald Trump, the week-long birthday break in China "will probably suck the volatility out of the Asian time zone for the rest of the week".

Observers pointed to White House trade adviser Peter Navarro brushing off reports that Washington was looking into implementing capital controls on China as "fake news" for the risk-friendly trading activity of the day.

A trader told The Business Times: "Mr Trump's tweets have already shown to be effective in making markets jittery but for all of China's anniversary celebrations, protests in Hong Kong are still ongoing, which may cast a pall on sentiment in the week."

In Singapore, trading volume was just 596.61 million securities, half of the daily average in the first eight months of 2019.

Total turnover came to $720.36 million, 67 per cent of the January-to-August daily average. Across the market, advancers trumped decliners 206 to 140. Just four of the blue-chip index's 30 counters ended in the red.

MOST ACTIVE

Yangzijiang Shipbuilding was the STI's most active counter with 30.5 million shares traded. It closed four cents or 4.2 per cent up at $1.

Yesterday, DBS Equity Research added the shipbuilder to its list of growth and blue-chip equity picks due to last month's order wins and ahead of its upcoming results for the third quarter.

"The stock's recent oversold rebound has since retreated to an attractive level. The stock is currently valued at just 0.6 times price-to-book, representing a 25 per cent/65 per cent discount to its global and Chinese peers. It is also trading at net cash value of $0.95/share," the research house said.

Singapore's banking trio also outperformed the benchmark. DBS Group Holdings climbed $0.24 or 1 per cent to $25.24, OCBC Bank gained $0.13 or 1.2 per cent to $10.99 while United Overseas Bank finished at $25.90, up $0.24 or 0.9 per cent.

Preliminary data from the Monetary Authority of Singapore on Monday showed that bank lending in Singapore was 0.6 per cent higher in August from July.

Maybank Kim Eng analyst Thilan Wickramasinghe expects that "stronger-than-expected loan growth may produce earnings upside in Q3, especially for UOB and OCBC".

But he noted that investors should closely watch non-performing loan risks from Asian currency unit lending.

With Keppel Reit's sale of Bugis Junction Towers to Village Prop for $547.5 million - a figure that is $388 million more than the price it was acquired for in 2006 - there was much attention on the Keppel counters.

With 11.2 million units changing hands, Keppel Reit, which closed unchanged at $1.26, was the most active of the S-Reits.

Meanwhile, the Reit's sponsor - conglomerate Keppel Corp - added four cents or 0.7 per cent to $5.97.

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