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Singapore: STI enjoys 'relief bounce' after MSCI news
AFTER falling 55 points in four consecutive sessions between Thursday last week and Tuesday this week, the Straits Times Index (STI) on Wednesday bounced 30.64 points to 3,325.77 after news that MSCI will not be including China 'A' shares in its emerging markets index yet.
Some of the selling last week was because of speculation that if MSCI did decide on the 'A' shares inclusion, Singapore's weighting would have to be reduced.
"This is a relief bounce, not rally," said a dealer. "The market is relieved that Singapore's weighting won't be cut. Of course, when and not if MSCI decides to bring 'A' shares in, the whole drama might be replayed."
From the time MSCI announced on May 29 it was considering introducing 'A' shares up to the start of trading on Tuesday, the STI had fallen about 98 points.
Turnover on Wednesday amounted to a mediocre 1.2 billion units worth S$1.1 billion and excluding warrants, there were 239 rises versus 179 falls.
The index's bounce was led by the banks - DBS and UOB on Tuesday had already started turning upwards. The Jardine group, whose membership in the STI is under threat because of new liquidity requirements, also helped add to the gain.
In the second line, shares of Q&M Dental and Silverlake Axis, both of which had come under pressure in recent days, also rebounded, the former gaining S$0.05 at S$0.795 on volume of 14.3 million and the latter rising S$0.03 to S$1.02 with 10.5 million done.