Singapore shares close higher after five straight days of losses

After having fallen 109 points in five straight sessions up to Monday, the Straits Times Index on Tuesday rebounded 25.15 points to 2,999.56. This was in line with an overnight rally in Wall Street and gains in Hong Kong and China, although weakness in the Dow futures probably led to a stalling of the upward momentum - the index rose to near its closing level in the late morning and stayed there for all of the second half.

As has become the norm in past months, turnover was low at 1.3 billion units worth S$880.3 million. Volume in STI components amounted to 220.4 million units worth S$603.5 million, which means that non-STI stocks only contributed about S$277 million or 31 per cent of total business. Excluding warrants, there were 265 rises versus 140 falls.

The three banks have been the main drivers of the index throughout the year and it was again the case on Tuesday. DBS led the way with a S$0.35 or 2 per cent jump to S$17.60 on volume of six million shares following its Monday release of third quarter figures.

Macquarie Warrants (MW) said in its daily newsletter that Macquarie Equities Research (MER) believes the key reasons to buy DBS are (i) good earnings momentum in a relative context, (ii) relative beneficiary of higher rates given the strong S$ liquidity position, (iii) potential to lift dividend payout ratios, and (iv) potential to shift the strategic focus towards cost efficiency if growth opportunities continue to disappear. It has a 12-month target price of S$20.

Stocks to watch: CapitaLand, Pteris, VIT, Grand Banks Yachts

CORPORATE news is likely to drive trading activity here on Tuesday morning, amid a lack of catalysts and a retreat on Wall Street overnight.

CapitaLand

CAPITALAND Vietnam has entered into a joint venture with Saigon Commercial & Tourism Corporation, a subsidiary of Vietnamese developer Thanh Nien Corporation, to develop a prime site in District 2 in Ho Chi Minh City, for an estimated project value of US$55 million.

Pteris

PTERIS Global, a provider of integrated airport facility equipment globally, has secured contracts worth S$64.2 million from customers in China and the US.

Viva Industrial Trust

Viva Industrial Trust (VIT) reported a 2.4 per cent decline in distribution per stapled security (DPS) for the third quarter ended Sept 30 to 1.647 cents, due to enlarged DPS base following the issuance of 80.3 million new stapled securities in June. But distributable income rose 15.1 per cent to S$11.6 million and net property income for the quarter rose 29.6 per cent to S$12.5 million, driven by additional rental contribution from Jackson Square and Jackson Design Hub, and higher rental and other income from Technopark@Chai Chee.

Grand Banks Yachts

GRAND Banks Yachts managed to swing to a net profit of S$1.2 million in the first quarter ended Sept 30, from a net loss of S$1.3 million in the year-ago period. Following restructuring efforts after a major acquisition, gross profit margin jumped to 24.5 per cent from 9.5 per cent over the comparative periods.

Singapore shares close lower ahead of expected Wall Street weakness

WEAKNESS in the Dow futures on Tuesday outweighed slight gains in Hong Kong and China, bringing pressure to bear on the Straits Times Index (STI). The selling accelerated in the late afternoon after Europe opened in the red, with the result that the STI finished 30.54 points or one per cent lower at 3,052.53 in low volume of 1.3 billion units worth S$953.5 million.

Of this, S$683 million or 68 per cent came from trading in the 30 index stocks and stripping out the latter, the average value per unit traded was S$0.29. Excluding warrants there were 132 rises versus 285 falls.

The STI had risen for four consecutive days before Tuesday, gaining about 64 points, largely driven by promises of more stimulus from central banks in Europe, China and Japan.

However, with the US Federal Open Markets Committee (FOMC) meeting this week, and even though no rate hike is expected at the meeting, brokers said that markets have switched into cautious mode since the FOMC may offer clues as to when the rate hikes might begin.

Stocks to watch: SGX, Mapletree Commercial Trust, Cache Logistics Trust

THESE companies announced results that may influence trading on Thursday.

Singapore Exchange: SGX raised its base dividend and outlined its strategy to raise liquidity in the sluggish securities market as net profit rose 28 per cent for its fiscal first quarter ended Sept 30.

The market operator is raising its first-quarter cash dividend to five Singapore cents per share from four Singapore cents a year ago, and future quarterly payouts are expected to follow suit.

Net profit increased to S$99.3 million, or 9.3 Singapore cents per share, as operating revenue rose 30.1 per cent to S$219.6 million.

Singapore shares close mixed; penny stocks in focus

The Straits Times Index may have risen 6.67 points to 3,025.7 but Wednesday's trading was more about the rotational punting of penny stocks than the index. This was borne out by the volume statistics - 2.5 billion units worth S$696 million changed hands, which was an average of only S$0.28 per unit traded.

This compares with Tuesday's average of S$0.37, which suggests that in a week that is expected to be quiet, house traders and dealers, reassured by the recovery in blue chips, are turning their energies to the second- and third-line. Excluding warrants there were 218 rises versus 211 falls.

New names topped the actives list. Loyz Energy, which was the volume leader on Tuesday, did not feature in the top 20, and its place was taken by Stratech Group. Other names at the summit included Great Group, China Fishery and China Sky.