singapore stocks grind higher ahead of fed rate decision 1332832015

Singapore reported disappointing exports during the month of August

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By :  ,  Financial Analyst

Singapore stocks moved up nearly 1 per cent on Thursday as investors positioned themselves bullishly ahead of the US Federal Reserve interest-rate meeting, betting on the chances of the central bank keeping its interest rates on hold.

The oil and gas sector was the best performer following firm crude oil prices.

Investors preferred to ignore disappointing data on Singapore exports that showed the country could tip over into a technical recession.

Indices and sectors

The Straits Times Index (STI) ended 27.07 points or 0.94 per cent higher at 2,895.81, taking the year-to-date performance to -13.95 per cent.

The FTSE ST Mid Cap Index gained 0.09 per cent, while the FTSE ST Small Cap Index rose 0.20 per cent.

The Singapore Exchange traded a volume of 1,077.3 million shares valued at SG$1,152.2 million. Gainers outnumbered losers by 221/161.

Amongst the FTSE ST sectors, the gaining sectors included oil and gas (+3.37 per cent), consumer goods (+1.03 per cent), technology (+0.84 per cent), telecom (+0.82 per cent) and utilities (+2.72 per cent). Losing sectors included maritime (-1.84 per cent), healthcare (-0.39 per cent), China top index (-0.39 per cent), CataList index (-0.12 per cent) and China (-0.12 per cent).


TLV Holdings, which owns the Taka Jewellery chain, made its debut on the Catalist board on Thursday (Sep 17), and closed the day at 28.5 Singapore cents, well above its placement price of 22 Singapore cents. "Taka is different from other jewellers because we have the local and export (businesses), and we have the global market. Business is almost 50-50 for the local (market), we have got about almost 50 and for the overseas (market), slightly above 50," said TLV Managing Director Michael Teo, according to Channel News Asia.

Shares in SMRT Corporation Ltd. (SGX:S53) jumped nearly 7 per cent to SG$1.31. The sharp rally in the price prompted a query from the Singapore exchange. In reply SMRT said: "The company is not aware of any information not previously announced concerning the company, its subsidiaries or associated companies, which might explain the trading today."

Another company which attracted a query from the Singapore exchange was OSIM International Ltd. (SGX:O23), whose shares jumped 4 per cent to SG$1.56. The exchange issued an advisory to “trade with caution” after the company said it was not aware of any reasons that could explain the spike in its shares.

LionGold Corp Ltd (SGX:A78), which is a gold miner listed on the CataList board, said Thursday that net losses during the first quarter ended June 30 narrowed to SG$802,000 from SG$20.3 million the prior year period. "The decrease is mainly due to an allowance for impairment on available-for-sale financial assets of SG$8.5 million incurred in 1Q2015 which did not recur in 1Q2016; and a SG$1.6 million gain recognized from the disposal of available-for-sale financial assets in 1Q2016," the company explained, according to the Business Times.

T T J Holdings Ltd (SGX:K1Q) fell 1.52 per cent to SG$0.325. The company said Thursday that it had secured structural steel works contracts for an LNG project in Pengerang, Johor. It was also awarded a civil defence contract for providing doors for MRT stations along the Thomson line. The two contracts aggregated SG$16 million in value.

IX Biopharma Ltd (SGX:42C) announced Thursday that the phase 2A and 2B clinical trials for Wafermine, its flagship product, had proved to be successful. Dr Paul Rolan, director of drug development at iX Biopharma, said: "These results put us in an excellent position to complete the clinical development programme, which will deliver a new alternative in management of severe pain." The stock closed at SG$0.285, up 5.56 per cent.

Economic news

Singapore’s non-oil domestic exports (NODX) during August fell harder than expected, showing that the island-republic is likely to head into a technical recession, according to the Business Times. On a year-on-year basis, the NODX declined 8.4 per cent compared to analysts’ estimates of a mere 3.5 per cent fall. However, on a month on month basis the NODX fell 4.6 per cent versus the 2.5 per cent gain seen in July and a 0.2 per cent increase projected by economists. "The lacklustre NODX print joins other disappointing Singapore economic prints since the start of the third quarter, including industrial production, retail sales and manufacturing PMI," said Barnabas Gan of OCBC Bank, warning that the risk of a technical recession had “increased significantly.”

The US Federal Reserve held flat its interest-rate near zero though the US economy continued to grow moderately. The central bank held off from a much anticipated rate increase because of the global turmoil following the Chinese slowdown, said Channel News Asia. "A lot of our focus has been on risks around China, but not just China, emerging markets more generally and how they may spill over to the United States," said Fed Chair Janet Yellen at a news conference following the rate announcement. "We've seen significant outflows of capital from those countries, pressures on their exchange rates and concerns about their performance going forward. The question is whether or not there might be a risk of a more abrupt slowdown than most analysts expect."

On Wall Street Thursday, the Dow and S&P 500 fell, while the Nasdaq advanced slightly in a choppy session after the Federal Reserve kept interest rates at zero. The Dow Jones Industrial Average shed 65.21 points (0.39 per cent) to 16,674.74. The broad-based S&P 500 fell 5.11 points (0.26 per cent) to 1,990.20, while the tech-rich Nasdaq Composite Index added 4.71 points (0.10 per cent) at 4,893.95.

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