Singapore shares buck downtrend in Asia

SINGAPORE shares bucked the downtrend in most Asia bourses on Thursday (Jun 8), after recovering some lost ground in the afternoon session.

The 30-blue-chip barometer, the Straits Times Index (STI), registered an increase of 0.2 per cent or 7.03 points to 3,186.61 points.

This was in contrast to most key Asian indices, which finished in the red.

International investors were concerned that the United States central bank might raise interest rates at its meeting next week, after two other central banks hiked theirs on Wednesday.

The developed market space was upended after the Australian and Canadian central banks both opted to raise rates against consensus expectations of a hold. Both central banks opted to pause earlier this year, and market participants generally had not expected them to raise policy rates further, DBS Group Research noted.

The key takeaway is that central banks are data-dependent, and a pause does not guarantee the end of rate hikes, said the strategists. Now that the labour market in the US has proven to be strong, a firm inflation data print next week might just tilt the odds in favour of another hike, with Fed officials possibly planning one or two more hikes. This would be the “hawkish case”, and might well upend the risk-on sentiment that has been around for the past couple of weeks, they added.

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Singapore Airlines ’ share price soared 1.6 per cent to a three-year high of S$7 – a figure last recorded in March 2020, when the pandemic started to hit the national carrier’s passenger traffic. OCBC Investment Research analyst Ada Lim raised the target price on the airline to S$7.18 from S$6.50, counting on sustained robust air travel demand.

Property, engineering and construction group Lian Beng , whose privatisation offer closes on Friday after an extension a fortnight ago, was up 0.7 per cent to S$0.685 – higher than the revised offer price of S$0.68 per share. The offeror had garnered 82.4 per cent of the total issued shares as at the last update on Wednesday.

Across the broader market, gainers and decliners were almost evenly split at 263 to 264, with a turnover of about 1.2 billion securities worth S$899.2 million in total.