singapores sti trades flat as investors await tidings from the us fed 950142015

A strong show from the Singapore Exchange, particularly its derivatives business, was the highlight of the day

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By :  ,  Financial Analyst

The Singapore Exchange traded mostly flat on Wednesday as investors shifted their focus from Chinese stock markets to the outcome of the monetary policy meeting of the US Fed, and hints on the future trajectory of interest rates.

Despite an optimistic overnight closing on Wall Street, Singapore’s broad market was weak judging from the declines in the mid-cap and small cap indices and the continuing negative breadth.

Indices and sectors

The Straits Times Index (STI) ended 2.91 points or 0.09 per cent higher at 3,284, taking the year-to-date performance to -2.41 per cent.

The FTSE ST Mid Cap Index declined 0.13 per cent, while the FTSE ST Small Cap Index declined 0.36 per cent.

The Singapore Exchange traded a volume of 1,979 million shares valued at SG$1,140.8 million. Losers outnumbered gainers by 230/184.

Amongst the FTSE ST sectors, the top gainers included technology (+0.39 per cent), consumer services (+0.37 per cent), maritime (+0.34 per cent) and financials (+0.13 per cent). Losing sectors included utilities (-1.07 per cent), health care (-1.00 per cent), oil and gas (-0.61 per cent) and Catalist index (-0.55 per cent).


Singapore Exchange Limited (SGX:S68) reported a 24 per cent jump in net profit during the quarter ended 2015 to SG$96.2 million on the back of a solid performance from its derivatives business, according to the Business Times. Quarterly revenue jumped 25 per cent higher to SG$215.6 million. While securities revenue was up 4 per cent to SG$56 million, derivatives revenue surged 64 per cent year-on-year to SG$86 million. Retail investors trading was up 9 per cent, as the exchange’s move to cut board lot sizes from 1000 shares to 100 shares appeared to have been successful in boosting volumes.

Sembcorp Marine Ltd (SGX:S51) said net profit during the three months ended June 30 plunged 17 per cent to SG$109.2 million from SG$131.6 million in the prior year period. Revenue was down 9.9 per cent SG$1.21 billion, primarily due to lower sales in its rig building and repair division, according to the Straits Times. The company said lower oil prices and muted industry sentiment hit its second quarter earnings. It declared an interim dividend of four Singapore cents, down from five cents paid out in the prior year period.

Frasers Hospitality Trust (SGX:ACV) reported distribution per unit (DPU) of 1.56 Singapore cents during the third quarter ended June 30, according to the Straits Times. Distributable income was SG$18.8 million while net property income came in at SG$19.2 million. Properties in Japan, Australia and the UK showed strong occupancy and helped offset weaker markets in Malaysia and Singapore, the manager said.

AIMS AMP Capital Industrial REIT (SGX:O5RU) reported a distribution per unit (DPU) of 2.75 Singapore cents for the first quarter of its financial year 2016, higher by 7.8 per cent compared to 2.55 cents in the prior year period. Gross quarterly revenue was up 10.7 per cent year-on-year to SG$30.3 million while net property income jumped 3.7 per cent to SG$20.2 million, according to the Straits Times.

CapitaLand Retail China Trust reported a 7.9 per cent rise in distributable income to SG$22.9 million in the second quarter, as net property income rose 5.3 per cent to SG$36 million, according to the Straits Times. DPU declared was 2.73 Singapore cents, 5.4 per cent from 2.59 cents in the prior year period.

Starhill Global Real Estate Invmt Trust (SGX:P40U) said distributable income rose 4.5 per cent to SG$28.1 million during the quarter ended June 30. Net property income was up 5.5 per cent to SG$41.3 million, led by the newly acquired Myer Centre Adelaide and a strong show from the Singapore portfolio. DPU was reported at 1.29 Singapore cents, up 3.2 per cent from 1.25 cents in the prior year period.

Economic news

The US Fed concluded its two-day monetary policy meeting, keeping its near zero interest rate unchanged, but drawing attention to the continuing improvement in the US economy and job market. Analysts interpreted the language of the Fed’s statement to mean that the possibility of an interest rate hike in September is still very likely.

Stocks therefore closed higher on Wall Street, as there was little to alter the commonly held expectation that the first interest rate hike will likely come in September, even December. The Dow Jones Industrial Average rose 0.69 percent to end at 17,751.39, the S&P 500 gained 0.73 percent to 2,108.57 and the Nasdaq Composite added 0.44 percent to finish at 5,111.73.

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