Optimism over US-China deal sends STI up

ASIAN equity markets were in a cheery mood after reports indicated that the final details of the US-China "Phase One" deal could be ironed out by the end of the following week.

With markets preoccupied with developments on this front, it was of little to no surprise that investor appetite for risk assets picked up.

In Singapore, the Straits Times Index (STI) saw broad gains, regaining Wednesday's losses to end the trading session at 3,174.19, an advance of 14.4 points or 0.5 per cent.

Elsewhere in the Asia-Pacific, benchmark indices fared similarly well with Australia, China, Hong Kong, Japan, Malaysia and Taiwan all posting gains. Swimming against the tide was South Korea, which ended lower.

When US President Donald Trump said that a trade deal may only be signed after the 2020 presidential election, it triggered equity sell-offs, which left Oanda Asia Pacific senior market analyst Jeffrey Halley wondering on Wednesday if Mr Trump referred to a mini or comprehensive deal.

"He appears to have been referring to the latter, as persons close to the talks said overnight that talks on an interim trade agreement with China, were on the home straight," Mr Halley said on Thursday.

In Singapore, trading volume stood at 915.62 million securities, 79 per cent of the daily average in the first 10 months of 2019. Meanwhile, total turnover clocked in at S$965.91 million, 92 per cent of the January-to-October daily average.

Across the market, advancers trumped decliners 216 to 145. Of the STI's 30 counters, four were in the loss column.

On 83.2 million shares traded, Golden Agri-Resources was the STI's most active counter. It gained 1.5 Singapore cents or 7 per cent to S$0.23 before index compiler FTSE Russell said on Thursday that Mapletree Logistics Trust (up S$0.02 or 1.2 per cent to S$1.72) will replace the agribusiness firm on the STI from Dec 23. Golden-Agri was dropped from the MSCI Singapore Index in November.

Among real estate investment trusts (Reits), Manulife US Reit edged up one US cent or 1 per cent up to close at US$0.98 after revealing that it will be included in the FTSE EPRA Nareit Index from Dec 23.

With its inclusion in the real estate index, Manulife US Reits units are likely to see higher trading liquidity and visibility as institutional investors and fund managers will be placing more attention on the US-focused office property play.

Singapore Exchange market strategist Geoff Howie noted: "Since listing in May 2016, Manulife US Reit has grown its US commercial portfolio from three properties with aggregate net leasable area (NLA) of 1.8 million square feet to nine properties with aggregate NLA of 4.7 million sq ft with assets under management now at S$2.1 billion."

Meanwhile, Mapletree North Asia Commercial Trust's (MNACT) units dipped S$0.01 or 0.9 per cent to S$1.15 after announcing the purchase of a 98.5 per cent stake in two Tokyo office properties from its sponsor for S$482.5 million.

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