singapore stocks begin the week on a bullish note 1561042015

A rebound in sentiment on the Chinese stock markets helps boost the SGX.

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By :  ,  Financial Analyst

Singapore stocks remained ensconced in a firm bull grip on Monday, led higher by glad tidings from Chinese stock markets that rose over 3 per cent on expectations of stimulus measures by the authorities, as well as a moderately bullish close on Wall Street on Friday.

The benchmark Straits Times Index (STI) has recorded gains in four out of the last five trading sessions. The year-to-date loss on the STI has now retracted below 10 per cent.


The Straits Times Index (STI) ended 33.61 points or 1.12 per cent higher at 3,032.11, taking the year-to-date performance to -9.90 per cent.

The FTSE ST Mid Cap Index gained 1.18 per cent, while the FTSE ST Small Cap Index rose 0.90 per cent.

The Singapore Exchange traded a volume of 1,805.6 million shares valued at SG$1,360.2 million. Gainers outnumbered losers by 296/147.

Amongst the FTSE ST sectors, the top gaining sectors included consumer services (+2.39 per cent), consumer goods (+1.79 per cent), oil and gas (+1.47 per cent), telecommunications (+1.37 per cent), basic materials (+1.30 per cent), Catalist Index (+1.12 per cent), maritime (+1.07 per cent), and technology (+1.07 per cent). Utilities (-1.31 per cent) was the only losing sector.


Shares in Singapore Technologies Engineering Ltd (SGX:S63) were up 2.22 per cent to SG$3.23. The company’s aerospace division has won contracts worth SG$410 million during the third quarter including for airframe and components maintenance for a US airline and cabin interior modification for another US carrier’s fleet of A319, as reported by TODAY. ST Engineering is the world's largest commercial airframe maintenance, repair and operations provider.

SPH REIT (SGX:SK6U) was up 1.05 per cent to SG$0.965. First-quarter distributable income at the REIT fell 4 per cent to SG$33.6 million, though full year income grew 1.6 per cent to SG$138.5 million. Distribution per unit (DPU) for the quarter ended Aug 31 was unchanged at 1.39 cents and rose 0.7 per cent to 5.47 cents for the year, the Straits Times said.

Shares in Asia’s largest commodity trader Noble Group Limited (SGX:N21) continued their upward trend, rising nearly 10 per cent on Monday to SG$0.515 as investors bid for the stock amidst a global rebound in commodity prices. Volumes traded in the counter were 186 million shares, over three times the three-month daily average, as reported by Bloomberg.

Chin Kuan Engineering and Contractors, a unit of Ley Choon Group Holdings Ltd (SGX:Q0X), has won a contract worth about SG$2.5 million awarded by PUB Singapore for the supply and laying of water mains in the east, the Straits Times reported.

Company founder and managing director Lee Boon Teck as well as independent directors Teo Hin Guan and Low Hai Lee were ousted from the board of door maker KLW Holdings Limited (SGX:504) at an extraordinary general meeting on Monday, the Straits Times reported. Another independent director, Mr Ho Pong Chong, is said to have resigned.

Economic news

According to the latest annual report for the fiscal year ended March 31, 2015 from the Council for Estate Agencies, the sluggish property market has forced about 140 real estate agencies out of business and about 3,000 property agents have quit the industry. "It will not be boom town 6-12 months down the road given the build-up of completed and unsold non-landed residential units, stringent access to borrowing and interest rates rising,” said Tan Tee Khoon, managing director of KF Property Network, a subsidiary of Knight Frank, as quoted by the Business Times.

While speaking yesterday at the opening of the 6th Singapore Corporate Governance Week of the Securities Investors Association (Singapore), Singapore Exchange (SGX) chief regulatory officer Tan Boon Gin revealed that the exchange will examine the annual reports of mainboard companies as a part of a review to check if they adhere to the "comply or explain" requirement in the Singapore Code of Corporate Governance. About 550 annual reports will be reviewed by audit firm KPMG, Mr Tan said.

According to most economists, Singapore’s economic growth numbers for the third quarter, which are due out tomorrow, will likely show that the island republic suffered a mild technical recession – the first time such an event has occurred since the global financial crisis of 2008. “With a technical recession and full-year inflation expected to be negative, currency appreciation becomes a difficult policy to maintain,” said DBS economist Irvin Seah in the context of a likely easing by the Monetary Authority of Singapore at its ensuing monetary policy meeting this Wednesday.

China’s central bank has expanded a trial that will allow banks to borrow funds using their credit assets as collateral. The government will also increase tax support for shantytown developments, the State Council said on its website on Saturday. Deputy central bank governor Yi Gang was quoted by official media as saying that China's stock market correction is "almost over."

On Wall Street Monday, stocks closed a shade higher despite investor nervousness regarding the looming third-quarter results season which is projected to be the worst in six years. Advances in utilities share countered a decline in energy stocks following weakness in the crude price, Reuters said. The Dow Jones Industrial Average rose 47.37 points, or 0.28 percent, to 17,131.86, the S&P 500 gained 2.57 points, or 0.13 percent, to 2,017.46 and the Nasdaq Composite added 8.17 points, or 0.17 percent, to 4,838.64.

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