TAKING STOCK STI at two-month high on bullish regional sentiment
Index within striking distance of record high before US sub-prime crisis hit
SINGAPORE'S stock market cemented its remarkable comeback from the pits of a global credit squeeze by rocketing nearly 100 points yesterday. The surge - built on the back of bullish regional sentiment and Wall Street's robust performance on Friday - powered the Straits Times Index (STI) to 3,639.02 points.
Index within striking distance of record high before US sub-prime crisis hit
SINGAPORE'S stock market cemented its remarkable comeback from the pits of a global credit squeeze by rocketing nearly 100 points yesterday. The surge - built on the back of bullish regional sentiment and Wall Street's robust performance on Friday - powered the Straits Times Index (STI) to 3,639.02 points.
That brought the index to within striking distance of a record close of 3,665.13 points it hit on July 24.
It also marked a 23 per cent rebound from the 2,962.01 points the STI fell to on Aug 17, when the global meltdown triggered by the United States mortgage crisis was at its fiercest.
Yesterday's 96.8-point - or 2.73 per cent - rise was underpinned by a healthier trading volume, reflecting the more buoyant sentiment. About 2.29 billion shares worth $2.61 billion changed hands, a step up from the 2.03 billion shares worth $2.31 billion the market averaged last week. Gainers led losers by 544 to 244.
POSITIVE FACTORS
Yesterday's 96.8-point - or 2.73 per cent - rise was underpinned by a healthier trading volume, reflecting the more buoyant sentiment. About 2.29 billion shares worth $2.61 billion changed hands, a step up from the 2.03 billion shares worth $2.31 billion the market averaged last week. Gainers led losers by 544 to 244.
POSITIVE FACTORS
"We saw strong interest as a result of a spillover from last Friday's gains on Wall Street. Locally, it was fuelled by M&A expectations involving the Singapore Exchange. The STI was also mirroring the strong performance in Hong Kong."MR SONG SENG WUN, CIMB-GK research head
RECORD PROSPECT
"The recent rebound here is not surprising. We're seeing strong corporate earning and macro data. The slowdown in the last few weeks was jus temporary. We see the STI heading towards 4,200 points in the next 12 months."MR ARJUNA MAHENDRAN, Credit Suisse Asia-Pacific chief strategistDealers said yesterday's buying spree was due to positive local factors and investors betting that policymakers would be able to keep the US out of recession.
CIMB-GK research head Song Seng Wun said: 'We saw strong interest as a result of a spillover from last Friday's gains on Wall Street. Locally, it was fuelled by merger-and-acquisition expectations involving the Singapore Exchange. 'The STI was also mirroring the strong performance in Hong Kong.' The Hang Seng Index gained 2.74 per cent, hitting a new record at 26,551.94 points, as strong gains in several blue chips propelled the key index past the 26,000-point level.
CIMB-GK research head Song Seng Wun said: 'We saw strong interest as a result of a spillover from last Friday's gains on Wall Street. Locally, it was fuelled by merger-and-acquisition expectations involving the Singapore Exchange. 'The STI was also mirroring the strong performance in Hong Kong.' The Hang Seng Index gained 2.74 per cent, hitting a new record at 26,551.94 points, as strong gains in several blue chips propelled the key index past the 26,000-point level.
While gains were broadbased, two counters stood out: Singapore Exchange (SGX) and DBS Group Holdings. Together, they accounted for 41.6 points, or slightly less than half, of the STI's total gains.
SGX shares rose $2, or 17.1 per cent, to close at a record $13.70 after hitting an intra-day peak of $13.80, with 16.77 million units traded. That alone accounted for a 30.8-point rise for the STI.
SGX shares surged on talk that the bourse operator could be an acquisition target amid accelerating stock-market consolidation worldwide.
SGX shares surged on talk that the bourse operator could be an acquisition target amid accelerating stock-market consolidation worldwide.
News of a deal between America's Nasdaq and Borse Dubai last week fuelled fresh belief that the SGX could be involved in a merger. SGX shares have surged 31.7 per cent in the last five trading sessions. DBS, meanwhile, ended 70 cents up at $20.90 following wire reports that the bank was holding a 5.30pm news conference. It was announced during the news conference that DBS' chief executive, Mr Jackson Tai, was quitting. This fuelled speculations and a jump in the bank's share price. Other banking plays also advanced. OCBC rose 20 cents to $8.85, while United Overseas Bank added 30 cents to $21.70.
Property plays likewise prospered. CapitaLand and City Developments gained following price target upgrades from Morgan Stanley. CapitaLand went up 20 cents to $8.20, while City Developments advanced 20 cents to $16.30.
High oil prices and new operations lifted Singapore Petroleum, which added 20 cents to $6.45 after it said an oilfield it partly owns in Indonesia had begun production.
Genting surged 5.5 cents to 69.5 cents after a broker upgrade. It was also the day's most heavily traded counter, with 194.74 million units changing hands.
Meanwhile, Zipper maker Fuxing China Group debuted 12 cents, or 26 per cent, up at 58 cents. The China-based company sold 175 million shares at 46 cents apiece. The recent gloom, at least for some, has clearly lifted. Credit Suisse Asia-Pacific chief strategist Arjuna Mahendran said: 'The recent rebound here is not surprising. We're seeing strong corporate earnings and macro data. The slowdown in the last few weeks was just temporary. We see the STI heading towards 4,200 points in the next 12 months.'
Source: The Straits Times
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