STI bucks regional losses, advances 0.76%

SINGAPORE shares displayed remarkable resilience on Friday, defying losses across most major regional bourses, which were rattled by hawkish "Fed speak" and a tepid overnight session in Wall Street.

The key Straits Times Index jumped 24.67 points or 0.76 per cent to 3,281.97, pushing through its 2021 high of 3,273.54.

The index closed higher every single day this week, despite much volatility in the region. Anxiety heightened as US Federal Reserve officials sharpened their signalling that the ultra-easy monetary policy was set to reverse course and taming inflation was a top priority. Week-on-week, the STI advanced 76.71 points or 2.4 per cent.

Singapore Exchange's market strategist Geoff Howie said: "DBS, OCBC and UOB have been the key drivers of the STI, already logging 9.9 per cent, 8.2 per cent and 11.3 per cent gains since Dec 31. This has been in line with global banks, which are also up close to 10 per cent over the past 10 sessions."

Regional bourses were awash in red on Friday from key gauges in Japan, Hong Kong, China and Taiwan to South Korea, Australia and Malaysia.

There is broad consensus that inflation remains the single biggest investment risk on the horizon.

Investment manager Federated Hermes' lead portfolio manager for Asia ex-Japan Jonathan Pines said that should current inflation rise higher or prove more permanent than the market expects, Asian stocks will be hit in two ways.

"First, through the mechanism of interest rates. Higher and more persistent inflation will result in relative underperformance of growth. Second, the 'real' (non interest rate) impact of inflation will affect stocks based on the ability of the underlying companies to pass on costs to customers," he said.

The next few weeks will draw focus on the earnings season, with markets watching the impact of inflationary pressures on firms' margins, along with the firms' growth outlook to defend some of their high valuations, especially for growth companies, said IG market strategist Yeap Jun Rong.

On the home front, some 955 million units worth S$1.11 billion were traded. Losers outpaced gainers, with 248 counters down and 209, up.

The day's biggest news came from UOB, which said in the morning that it will acquire Citigroup's consumer banking assets in Indonesia, Malaysia, Thailand and Vietnam for almost S$5 billion to scale up its retail franchise in Asean. UOB jumped S$0.75 or 2.6 per cent to S$29.93.

Mainboard-listed Straits Trading Company called for a trading halt on Friday morning, pending an announcement.

Hock Lian Seng Holdings also requested for a trading halt on the last half hour of Friday's trading session, pending an announcement. The Land Transport Authority has awarded a subsidiary of the mainboard-listed construction company a S$454 million contract for Phase 1 of the Cross Island Line. The counter jumped nearly 2 per cent to S$0.26 prior to the halt.