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STI tracks Wall Street to rise 0.1%

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But investors should not read too much into US market's recovery, given the light trading ahead of the Thanksgiving holiday

Singapore equities eked out slight gains yesterday as investors took heart from a rebound in Wall Street overnight after a two-day rout.

The benchmark Straits Times Index (STI) rose 2.73 points, or 0.1 per cent to 3,041.38.

Decliners outnumbered advancers 193 to 170, after about 1.22 billion shares worth $669.8 million changed hands.

FXTM's chief market strategist Hussein Sayed noted that US stocks rebounded, thanks to tech stocks and a slight recovery in oil prices.

That said, he pointed out that investors in Asia did not seem inspired, with equities "struggling to find direction"yesterday morning.

Notably, market observers seem to agree that investors should not read too much into Wall Street's recovery, given the light trading ahead of the US Thanksgiving holiday.

In a report released yesterday, the Singapore Exchange (SGX) noted that year to date (YTD), the STI has generated a return of -6.8 per cent.

This compares with YTD total returns of +0.2 per cent for the Nikkei 225, -5.1 per cent for the ASX 200, -6.7 per cent for the Hang Seng, and -19.5 per cent for the Shanghai Composite.

The five best performing STI constituents were: Dairy Farm (+19.2 per cent), ComfortDelGro (+13.7 per cent), ST Engineering (+12.1 per cent), Jardine Matheson (+10.4 per cent) and CapitaLand Mall Trust (+9.2 per cent).

CapitaLand Mall Trust gained 2.8 per cent, or six cents to close at $2.24 apiece yesterday. While Phillip Securities has a "neutral" recommendation on the counter with a target price (TP) of $2.09, Nomura and CIMB have both indicated "buy" ratings, with TPs of $2.40 and $2.28 respectively.

Among the real estate industrial trusts (Reits), AIMS AMP Capital Industrial Reit (AA Reit) advanced 3.8 per cent, or five cents to $1.35, after AIMS Financial Service Group announced that it plans to buy its partner managing the Reit for an undisclosed sum.

First Reit also rose 5 per cent, or five cents to $1.04, while Keppel Reit lost 1.8 per cent, or two cents to $1.12.

Conversely, according to SGX, the five least-performing constituents of the STI YTD included: Thai Bev, UOL Group, City Developments, Hutchison Port Holdings Trust and Golden Agri-Resources.

For the day, Golden Agri fell 2.2 per cent, or 0.5 cent, to finish at $0.225.

Also dragging down the index were SGX and the financials. While DBS Bank closed flat at $23, United Overseas Bank was down 0.9 per cent, or 22 cents to $23.88, and OCBC Bank lost 0.8 per cent, or nine cents to$10.80.

Nonetheless, OCBC Investment Research head Carmen Lee is of the view that the trade war will not break the banks.

"The market is in risk-off mode, and banking stocks have languished despite a fairly good set of Q3 results. With more rate hikes ahead, we expect NIM (net interest margin) to stay at current or higher levels.

"Based on our estimates, we expect FY2018 to be a record year for the banks.

"While market conditions are likely to be challenging, we believe that current share prices have priced in most of the negatives," Ms Lee added.

Singtel gained 0.6 per cent, or two cents to $3.10 after media reports noted that Bharti Airtel's debt woes is not expected to deter the regional telecoms player.

CPH gained 12.5 per cent to 0.9 cent after it announced that it will acquire oCap Management from Delphinium Capital, an investment company with a fintech and regulated financial services assets portfolio, for $61.8 million by issuing some five billion new shares at $0.012 apiece.

For full listings of SGX prices, go to http://btd.sg/BTmkts

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