Singapore shares rebound after strong session overnight on Wall St, Stocks

Tue, Feb 11, 2020 – 6:27 PM

ASIAN equities recovered from Monday’s slide due in part to a strong showing on Wall Street, where the main benchmarks hit record highs.

Singapore’s Straits Times Index (STI) clawed back most of the previous session’s losses to close 12.42 points or 0.4 per cent higher at 3,175.57.

Elsewhere in the Asia-Pacific, Australia, China, Hong Kong, Malaysia, South Korea and Taiwan all notched up gains. Japan was closed.

Of the bunch, the Shanghai Composite Index added 11.19 points or 0.4 per cent to 2,901.67. It was the benchmark’s sixth straight session ending in positive territory.

AxiCorp chief market strategist Stephen Innes noted that the performance of regional markets was also down to expectations of further injection of stimulus by the People’s Bank of China (PBOC) to curb the economic effects of the novel coronavirus outbreak.

He said: “Given the ongoing easing measures, the market thinks the PBOC will conduct a sizeable new batch of medium-term lending facility cuts later this week or early next week before the future loan prime rate fixing on Feb 20, and to guide both rates down by 10 basis points.”

Investors are also taking heart that new cases of the virus in China are falling. That said, Vishnu Varathan, Mizuho Bank’s head of economics and strategy for the Asia and Oceania treasury, cautioned investors not to be too optimistic, adding that dismissing the risk of secondary infections would be complacent.

Trading volume in Singapore was 1.50 billion securities, 27 per cent over the 2019 daily average. Meanwhile, total turnover was S$1.12 billion, 5 per cent more than last year’s intraday mean.

Advancers beat decliners 237 to 166, with seven of the benchmark’s 30 counters ending in the red.

Most medical plays, which have been red hot in recent weeks, closed lower on Tuesday with a notable exception being Clearbridge Health. The integrated healthcare company was up 0.6 Singapore cent or 3.8 per cent to 16.6 cents with 71.3 million shares traded, making it one of the most active counters on the Singapore bourse.

The local banks were mixed. DBS Group Holdings dipped S$0.02 or 0.1 per cent to S$25.09. OCBC Bank climbed S$0.05 or 0.5 per cent to S$10.77 while United Overseas Bank finished at S$25.78, advancing S$0.21 or 0.8 per cent.

STI counters which recently saw sell-offs like Singapore Airlines (up S$0.02 or 0.2 per cent to S$8.53) and Yangzijiang Shipbuilding (up 1.5 Singapore cents or 1.6 per cent to 98.5 cents) reversed course as investors and traders bought on dips.

SIA Engineering fell S$0.02 or 0.8 per cent to S$2.57 after OCBC Investment Research downgraded the provider of aircraft maintenance, repair and overhaul services to “sell” as the spread of the virus weighs on travel demand.

Units in NetLink NBN Trust were unchanged at S$1.00 after the business trust posted a 9.6 per cent increase in Q3 bottom line to S$21.5 million. UOB Kay Hian expects NetLink’s outperformance of the STI in 2020 to continue “as investors seek shelter in high dividend-yielding stocks amid external volatility”.

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