singapore stocks turn positive ahead of fed rate decision 1332432015

Singapore stocks staged a decent rally on Wednesday on the back of overnight gains in Wall Street as well as an uptrend on regional bourses ahead of the crucial US interest rate decision. Investors appear to be preparing for bullishness in stocks regardless of what the decision of the US Fed might be.

Indices and sectors

The Straits Times Index (STI) ended 30.5 points or 1.07 per cent higher at 2,872.44, taking the year-to-date performance to -14.64 per cent.

The FTSE ST Mid Cap Index gained 0.99 per cent, while the FTSE ST Small Cap Index rose 1.20 per cent.

The Singapore Exchange traded a volume of 1,333.2 million shares valued at SG$1,098.8 million. Gainers outnumbered losers by 275/126.

Amongst the FTSE ST sectors, the gaining sectors included maritime (+2.93 per cent), consumer services (+2.31 per cent), China (+2.10 per cent), China top index (+2.03 per cent), utilities (+1.19 per cent), industrials (+1.64 per cent) and oil and gas (+1.43 per cent). Technology (-0.01 per cent) was the only losing sector.

Stocks

Technics Oil & Gas Limited (SGX:5CQ) jumped 6.67 per cent to SG$0.640. The company announced a SG$70.5 million new-build order for a lift boat construction, according to the Business Times.

Sunpower (SGX:5GD) said Wednesday that it had entered into a placement agreement of up to 400 million shares at an issue price of SG$0.14 per share through placement agent Stirling Coleman Capital in order to raise about SG$56 million. The company said that two “interested persons” have indicated their interest to subscribe for up to 100 million placement shares (up to 25 per cent of the total placement shares each), according to the Business Times.

GKE Corporation Ltd (SGX:595) rose 5.48 per cent to SG$0.077. The company said yesterday it had entered into a sale and purchase agreement to sell its wholly owned unit Ever Flourish Development (HK) Co, which in turn holds a 40 per cent stake in Maoming City Hung Ji Construction Materials Co, for 15 million yuan (SG$3.3 million), according to the Business Times. The company intends to focus on its ready mix cement factory which is currently under construction and expected to be completed by end 2015.

Pharmesis International Ltd. (SGX:BFK) said Wednesday that Shenzhen Sichuang Meishi Pharmaceuticals Research And Development Co, a Chinese company that undertakes research and development (R&D) of pharmaceutical drugs, will subscribe for three million new shares of the company for SG$1.5 million in cash.

Travelite Holdings Limited (SGX:BCZ) disclosed Wednesday that it was in negotiations regarding a potential acquisition that could ultimately turn out to be “a major transaction.” It said the potential target was a local company that was primarily conducting the business of wholesaling and retailing of ready-made garments.

Economic news

The Real Estate Developers Association of Singapore (REDAS) said Wednesday that it was willing to work with the government to address the problem of an impending oversupply of private residential homes. According to REDAS, by 2019, about 67,000 new units would be available excluding executive condominiums; however, only 6,500 homes were sold during the 12 months ended June this year, according to Channel News Asia.

Separately in an effort to lobby the government towards relaxing the stringent property cooling measures, Augustine Tan, president of the Real Estate Developers' Association of Singapore (REDAS), said on Wednesday: "The property cooling measures, in the current tone and intensity, could actually increase the risk to the real estate market and economy." He was speaking at the REDAS' Mid-Autumn Festival lunch, according to Business Times. Private home prices in Singapore have fallen for seven consecutive quarters.

Data released yesterday by the Statistics Department showed that retail sales grew 5.2 per cent year-on-year in July, down from 7 per cent in June, led by reduced car sales. If vehicle sales were to be excluded, retail turnover increased only 0.8 per cent year-on-year in July, according to AsiaOne.

On Wall Street Wednesday, stocks ended higher based on gains in the energy sector as global crude oil prices jumped up almost 6 per cent in reaction to an unexpected drawdown in US stockpiles. The Dow Jones Industrial Average closed up 140.1 points, or 0.84 percent, to 16,739.95, the S&P 500 gained 17.22 points, or 0.87 percent, to 1,995.31 and the Nasdaq Composite added 28.72 points, or 0.59 percent, to 4,889.24.