Asia stocks end higher on Wall St gains

Singapore

STOCKS in Asia ended broadly higher on Wednesday, after a firm handover from Wall Street overnight. Some semblance of stability was restored in the markets after US stocks rallied the most since March, as corporate earnings provided a respite from trade tensions. The Dow and the S&P 500 jumped by more than 2 per cent each, while the Nasdaq surged nearly 3 per cent.

Falling in line with the rest of Asia was the benchmark Straits Times Index which rose 36.79 points, or 1.2 per cent to close the day at 3,071.1, as gainers outnumbered losers 232 to 141. Turnover came in lower though, with 1.12 billion shares worth S$898.7 million changing hands, versus a churn of 1.8 billion shares worth S$950.6 million the previous day.

Propping up the index was YZJ Shipbuilding which gained 4 per cent, or five Singapore cents to close at S$1.31 apiece. In a research report last week, DBS analyst Ho Pei Hwa noted that YZJ has entered into a joint venture (JV) agreement with Mitsui to establish a new shipbuilding company in China. The registered share capital of the JV could be as much as US$99.9 million, while the total capital to be employed could go up to US$299 million, YZJ said. According to Ms Ho, the JV could potentially lift the group's contract wins in 2019 by 20 per cent, and paves the way for YZJ into large scale LNG carriers. The brokerage has reiterated a "buy" call on the counter, with a target price of S$1.82.

Among the reits in play, CapitaLand Mall Trust gained 2.8 per cent, or six Singapore cents to close at S$2.17, while First Reit added 1.7 per cent, or two Singapore cents to S$1.20. For the first time this week, all three banking stocks also registered gains. OCBC led the way, rising 1.7 per cent to S$10.76, followed by UOB which was up 1.2 per cent to S$25.63, and DBS which added one per cent to S$24.49.

Also on Wednesday, brokerage UOB Kay Hian initiated coverage on industrial agri-food company, Japfa. Citing that the group is "deeply undervalued", and on a "strong turnaround path from 2018 onwards", the brokerage has issued a "buy" rating on the stock with a target price of S$0.90. This represents a 47.5 per cent upside to the counter's closing price of S$0.61 as at Oct 16.

Slipping into the midweek langour however, was Jiutian Chemical which plummeted 16.1 per cent, or 0.5 Singapore cent to 2.6 Singapore cents apiece. This comes after the Catalist-listed firm on Tuesday said it expects to report a net loss for the third-quarter ended Sept 30. The group's financial results are due by Nov 14. Separately, IEV Holdings also fell 11.6 per cent to 3.8 Singapore cents for the day, after the group recently announced that it intends to dispose its stake in a loss-making unit to eventually exit from the mobile natural gas business in Indonesia.

In other news, while Singapore's non-oil domestic exports (NODX) accelerated by 8.3 per cent y-o-y in September, analysts are of the view that this is unlikely to sustain as the trade war continues to cloud global outlook. Said Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye: "Third-quarter trade volumes may have been distorted by the escalating US-China trade war, as companies frontloaded exports before tariff increases."

Elsewhere in Asia, equities echoed the Wall Street cheer with Japan's Topix gaining 1.54 per cent, and South Korea's Kospi adding 1.04 per cent. Australia's S&P/ASX 200 also rose 1.2 per cent, recording its largest intra-day gain in almost four months. While markets in Hong Kong were closed for a public holiday, Chinese stocks ended a two-day losing streak to finish 0.6 per cent higher.

For full listings of SGX prices, go to http://btd.sg/BTmkts