STI closes 0.3% up, bucking Asian trend

BUCKING the falling trend across key Asian markets, the Straits Times Index (STI) rose 0.28 per cent to close at 3,244.89 on Wednesday, the first time the index has risen since the first trading day of July.

Turnover here was 1.98 billion units worth S$1.01 billion, with losers just edging out gainers 188 to 177.

Icy trade relations between the US and China kept Asian markets depressed across the region with the looming July 6 tariffs casting a pall over equity markets.

The Nikkei 225, Hang Seng, Shanghai Composite and Kospi all ended lower as they continued to feel the heat from US-China trade tensions.

In a note, DBS Equity Research expects the STI to head to a low of 3,200 before rebounding to 3,355 or even 3,417.

Among the reasons it gave for the rise are the upcoming second quarter 2018 earnings season which will be a distraction from trade war noise, and the fact that the World Cup lull period has ended with the start of round-of-16 games.

Shares in Singtel largely shrugged off its web outage on Wednesday morning, adding five Singapore cents or 1.66 per cent to close at S$3.07, putting it among the top 20 gainers on the mainboard.

The telco wrote in a Facebook post that some customers might have "difficulty accessing the internet", announcing two hours later that service had been restored.

Transport operator ComfortDelGro's counter advanced 3.04 per cent, or seven Singapore cents, on Wednesday to close at S$2.37, continuing an upward trend.

A potential increase in its taxi fleet, coupled with projected profit growth in fiscal 2019, moved DBS Group Research to upgrade transport operator ComfortDelGro from "hold" to "buy" with a target price of S$2.59, a 13 per cent upside from its previous target.

Speaking at the Monetary Authority of Singapore's (MAS) annual report media briefing, managing director Ravi Menon said Singapore's economic growth will remain steady despite rising trade friction.

Overall gross domestic product (GDP) is expected to come in around 2.5 to 3.5 per cent in 2018, which is unchanged from an earlier May official forecast.

Mr Menon cautioned that while the central prognosis for the Singapore economy this year remains intact, "spillovers from global trade conflicts bear close watching".

"Earlier this year, I described the 'Goldilocks' state of the global economy - healthy growth, low inflation and easy financial conditions. I had then also warned that the "three bears" - inflation, protectionism, and financial instability - could make an appearance any time to spoil the party.

"Six months later, we can say that at least two of the three bears have been sighted - inflation and protectionism," Mr Menon said.

Shares in the big three banks - DBS, OCBC and UOB - took note of the positive sentiment, all closing higher at the end of Wednesday trading.

Mr Menon also noted that euphoria in the Singapore property market called for caution, saying that developers should be cautious when making their land bids, bearing in mind the supply that's coming onstream, and adding the government was closely monitoring the property market.

Shares in Oxley Holdings, one of Singapore's largest developers, closed 2.44 per cent lower after his remarks to end at 40 Singapore cents, with 1.7 million trades done.

The semiconductor industry looks to remain at the heart of the global trade dispute, with a Chinese court announcing a temporary ban on chip sales by the US's Micron Technology. Micron said it hasn't been served with the injunction and won't comment until it does, according to reports from Bloomberg.

Singapore semiconductor shares closed mixed after the announcement, with UMS Holdings closing 1.24 per cent lower at 79.5 Singapore cents, while Ellipsiz Ltd closed flat at 47.5 Singapore cents.

For the full listing of SGX prices, go to btd.sg/BTmkts