singapore stocks rally as mainland china and hong kong shares power higher 1256412015

Singapore extended their gains into a second consecutive winning session on Wednesday, boosted by a strong overnight close on Wall Street, and a rally in regional exchanges such as Tokyo and Hong Kong. The Nikkei 225 Japanese stock index surged 7.7 per cent in its best single day jump since the days of the financial crisis, while the Hang Seng Index vaulted 4.1 per cent, its biggest gain since December 1, 2011.

The banks led from the front in Wednesday’s rally on the SGX, rising between 1.5 per cent and 2.6 per cent, as investors also paid heed to the rebound on the Chinese equity markets on the back of hopes for more stimulus measures from the authorities.

Indices and sectors

The Straits Times Index (STI) ended 32.91 points or 1.15 per cent higher to 2,885.32, taking the year-to-date performance to -14.26 per cent.

The FTSE ST Mid Cap Index gained 1.21 per cent, while the FTSE ST Small Cap Index rose 0.89 per cent.

The Singapore Exchange traded a volume of 1,186.5 million shares valued at SG$1,059.4 million. Gainers outnumbered losers by 245/151.

Amongst the FTSE ST sectors, the gainers included utilities (+2.66 per cent), maritime (+2.37 per cent), basic materials (+2.21 per cent), oil and gas (+2.16 per cent), China top index (+1.86 per cent), real estate holding and development (+1.75 per cent), consumer services (+1.73 per cent) and financials (+1.32 per cent). Telecommunications (-0.35 per cent) was the only losing sector for the second successive day.

Stocks

CDL Hospitality Trusts (SGX:J85) has acquired LR (Cambridge) Limited, which owns and operates the Cambridge City Hotel in the UK, for £62.5 million (SG$135.3 million), marking its first property acquisition in Europe. "Cambridge has been one of the strongest performing hospitality markets in UK and the burgeoning life science cluster will support the growth trajectory of the market," said trust managers' CEO Vincent Yeo, as reported by the Business Times.

Rubber producer Halcyon Agri Corporation Ltd (SGX:5VJ) was up nearly 10 per cent to SG$0.665. According to the Business Times, which cited an SGX filing, the company is in confidential discussions with "certain parties regarding a potential strategic transaction."

Hu An Cable Holdings Ltd (SGX:KI3) surged 22.22 per cent to SG$0.011. The company said it was required by the local government of Wuxi City, Guanlin Town, to de-consolidate and divest three of its Chinese subsidiaries – Wuxi Hu An, Wuxi Shenhuan Electric Co. and Shenhuan Cable Technology Co. – to potential purchaser Yixing Jinxiao Copper Industry Co. “The PRC local government has initiated the Proposed Disposal for the following main reasons: (i) to assist the Group to overcome the financial and operational difficulties which it currently faces in the PRC, (ii) to safeguard the livelihoods of the Group’s employees, and (iii) to protect the interests of the Group’s shareholders and creditors,” the company clarified in a statement.

Economic news

The three-month Singapore interbank offered rate (Sibor), a key short-term interest rate which is used to set rates on mortgages, rose Wednesday to 1.07508 per cent, its highest level since November 2008, the Business Times reported. The upward pressure on interest rates has mounted with the weakening of the Singapore dollar, which fell to a six-year low of SG$1.4296 against the US dollar this week.

Data released by SRX Property on Wednesday showed that rentals for Housing and Development Board (HDB) flats fell 0.6 per cent in August compared to July, and were down 3.6 per cent on the year. The decline in rental prices was accompanied by a slide in rental volumes, with 1,646 units rented in August, down 6.1 per cent from 1,752 units rented in July.

SRX data also showed that rentals in the non-landed private residential market fell 0.4 per cent in August compared with the previous month, and were down 5.7 per cent on the year, according to the Straits Times.

The SBF-DP SME Index, a joint initiative of the Singapore Business Federation (SBF) and DP Information Group (DP Info) which measures the business sentiment of SMEs for the next six months, showed that business sentiment has fallen to a three year low, the Business Times said. The index covered about 3,600 SMEs and found that participants across all industries expected weaker sales and profits over the following six months.

Exchange operator Intercontinental Exchange is set to launch its Singapore trading hub on November 17, but will not be offering certain planned commodities futures contracts that had met with opposition from a rival Chinese exchange. The new exchange will offer trading in mini Brent futures, mini Gas oil futures, kilo gold futures and mini onshore and offshore renminbi futures, subject to approval from Singapore authorities, the FT said.

On Wall Street on Wednesday, stocks closed lower as initial enthusiasm related to the global rally petered out. Moreover, a fresh slide in crude prices pressured the energy sector and weakness in Apple dampened sentiment, according to Reuters. The Dow Jones Industrial Average fell 1.45 percent, to 16,253.57, while the S&P 500 lost 1.39 percent to 1,942.04 and the Nasdaq Composite ended down 1.15 percent at 4,756.53.