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Singapore stocks close higher as traders expect dovish FOMC; pennies rule the day
THE Straits Times Index (STI) on Monday drifted within a narrow band before a late afternoon push took it up 24.69 points to 2,852.14, ahead of this week's US Federal Open Markets Committee (FOMC) meeting. The bounce came after an 80-point jump in the Dow futures and after Europe opened in the black.
The real action though, was in penny stocks led by fund managers ISR Capital which was the former Asiasons WFG Financial. ISR's stunning S$0.108 or 71 per cent rocket up to S$0.26 on volume of 88.8 million appeared to spark interest in the three penny stocks responsible for the penny segment's October 2013 crash - LionGold, Blumont and Asiasons, the latter now known as Attilan. All three finished with gains in high volume.
ISR was queried last week by the Singapore Exchange and replied in the negative. "Much of the volume in many of these stocks can disappear as quickly as it appeared," said a dealer.
Despite turnover being a robust 1.5 billion units, dollar value was a poor S$748.4 million, of which S$494 million or 66 per cent was done in the 30 index components. The advance-decline score excluding warrants was 212-143. The average value per unit traded was just under S$0.50.
Although the implied probability of an interest rate hike after the meeting is currently only 20 per cent, traders are more concerned with the language of the accompanying statement to derive clues as to when rates will actually be raised.
"It looks like markets are betting on a dovish Fed," said a dealer.