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Singapore stocks finish week with flourish as banks continue their recovery
ONE of the most strident complaints made against the local stock market is that it is a perennial underperformer, lacking in liquidity and excitement when compared to Hong Kong. This may have been true for most of 2014 and 2015 and even the first two months of 2016 but it wasn't the case this week though. The Straits Times Index's 188 points or 7 per cent jump to 2,837 placed it among the better performers in the region.
On Thursday, for example, the STI's 2.2 per cent rise made it the region's best performer. This was followed by a 49.38 points or 1.8 per cent jump on Friday, a rise that came with a robust 2 billion units worth S$1.75 million traded, volume which just three months ago would have been deemed unthinkable.
A few qualifiers however, are necessary - the majority of daily volume is done in the 30 STI components, the majority of the index's bounce has come from the banks and the broad market has probably lagged quite a fair distance behind.
"The three local banks were once again the best performers among the 30 index constituents after advancing more than 3 per cent each," noted Macquarie Warrants in its comments on Thursday's action.
"The accumulated rally this week has sent the banks' share price to their highest close in six weeks, closing convincingly above their 50-day moving average. Cumulatively, these three stocks represented nearly half of the gains in the STI (on Thursday)."