singapores straits times index gains for the second successive session 1463862015

Better-than-expected Chinese manufacturing data lifts regional sentiment

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By :  ,  Financial Analyst

Singapore stocks inched higher on Thursday, following Asian markets, as official Chinese manufacturing data for September turned out to be slightly better than expected.

Though volumes were tepid, it was encouraging that the STI clocked its second daily gain in a row, after its earlier 5-session string of losses.


The Straits Times Index (STI) ended 10.96 points or 0.39 per cent higher at 2,801.85, taking the year-to-date performance to -16.74 per cent.

The FTSE ST Mid Cap Index gained 0.14 per cent, while the FTSE ST Small Cap Index rose 0.37 per cent.

The Singapore Exchange traded a volume of 1,193.9 million shares valued at SG$814.6 million. Gainers outnumbered losers by 222/152.

Amongst the FTSE ST sectors, the gaining sectors included basic materials (+3.70 per cent), CataList index (+1.84 per cent), utilities (+1.58 per cent), China (+1.40 per cent), China Top Index (+1.31 per cent), real estate holding and development (+1.17 per cent) and technology (+1.07 per cent). Losing sectors included oil and gas (-0.55 per cent), healthcare (-0.30 per cent) and real estate investment trusts (-0.20 per cent).


Sarine Technologies Ltd (SGX:U77) was up 2.35 per cent to SG$1.74. The company yesterday issued an update on the diamond industry and guidance on its profitability. The company said it expected revenues for Q3 2015 to be approximately half of those in Q3 2014, and down by a third on a sequential basis compared to Q2 2015, citing challenging market conditions due to “unsustainable rough vs. polished prices as well as residual inventory overhang.” The company said it expected to record an operating loss for the quarter of around US$1.5 million (SG$2.14 million).

Analysts surmise that the sale earlier this week of a 7.04 per cent stake in offshore services firms Ezra Holdings Limited (SGX:5DN) to Norway’s DNB Bank may have been more likely the pledge of a significant stake by a shareholder as collateral for financing, according to the Business Times.

OUE Ltd (SGX:LJ3) fell 2.23 per cent to SG$1.75. According to the Business Times, the property group will acquire the entire 33.33 per cent stake in OUB Centre Ltd (OUBC), being offered by the Kuwait Investment Office, for SG$465.42 million. The purchase will boost OUE’s stake in OUBC to 83.33 per cent and give it an effective 67.95 per cent stake in One Raffles Place, the mixed-use development in the central business district.

A unit of BBR Holdings (S) Ltd. (SGX:KJ5) has won a SG$116 million design-and-build contract for a mixed-use development in Yishun Avenue 4, according to the Business Times.

QT Vascular Ltd (SGX:5I0) jumped a massive 53.85 per cent to SG$0.140. According to an announcement, the company and its chief executive officer have successfully defended themselves against a patent infringement lawsuit filed by AngioScore, another medical company.

Economic news

Advance estimates released yesterday by the Housing Development Board (HDB) showed that the Resale Price Index of HDB flats declined to 134.6, down 0.3 per cent compared to the previous quarter, according to TODAY. This was the ninth successive quarter during which HDB prices fell and according to analysts, the bottom of the market may be round the corner. “The continued very marginal decline indicates that the market may find its footing soon,” said ERA key executive officer Eugene Lim, observing that HDB resale prices have become relatively stable over the past three quarters.

Meanwhile, flash estimates from the Urban Redevelopment Authority (URA) showed that prices of private homes fell an estimated 1.3 per cent during the latest quarter, marking eight successive quarters of price declines, according to Straits Times.

According to data from the Singapore Institute of Purchasing & Materials Management released on Thursday (Oct 1), manufacturing activity in Singapore, as indicated by the latest Purchasing Managers Index, contracted to 48.6 in September from 49.3 in August. The index declined for the third consecutive month and was the weakest in almost 3 years, said Channel News Asia.

According to the Business Times, the Monetary Authority of Singapore (MAS) proposes to impose margins on OTC derivatives that are not cleared by a qualifying central counterparty, excepting physically settled foreign exchange forwards and swaps. The MAS said it would study the impact of these proposals, which are intended to reduce counterparty risks and make the trading of OTC derivatives safer. Interested parties may submit their comments on the proposal by November 1.

Singapore’s Prime Minister Lee Hsien Loong announced yesterday the formation of the committee on “The Future Economy,” a new economic review committee, and proposed a series of public debates intended to build on the Our Singapore Conversation (OSC) project, according to TODAY. “One important area needing review is our economy,” said Mr Lee. “We must create opportunities even in a weaker global economy, and move faster towards higher skills, innovation and productivity.”

Channel News Asia reported that the second tranche of the Singapore Savings Bond will be issued on November 1 and earn an average interest rate per annum of 2.78 per cent, higher than the 2.63 per cent offered for the first issue.

On Wall Street Thursday stocks ended mostly flat as investors kept a low profile ahead of the Friday US jobs report. The Dow Jones Industrial Average lost 12.69 points (0.08 per cent) at 16,272.01. The broad-based S&P 500 rose 3.79 points (0.20 per cent) to 1,923.82, while the tech-rich Nasdaq Composite Index advanced 6.92 points (0.15 per cent) to 4,627.08.

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