STI steady, up 0.7% in mixed backdrop

THE local bourse's key Straits Times Index displayed some resilience on Thursday and capped two days of straight losses with gains amid a mixed regional backdrop and despite Wall Street's overnight retreat and soft Chinese data.

The STI rose 21.22 points or 0.7 per cent to 3,304.93 led by gains in banking stocks and news-flow on mergers and acquisitions which were enough for traders to snub the falls in US stocks, which had halted five straight days of record closings.

The overnight fall in US indices was partly due to a dearth of market data, which provided traders a chance to take profit on the back of current valuations.

Japan's Nikkei 225 was a stand-out performer, rising 1.14 per cent to the highest closing level since June 2007. Hong Kong's Hang Seng was up 0.3 per cent while China's Shanghai Composite slipped 0.4 per cent

Growth in China's industrial output fell more than expected to 7.7 per cent from a year earlier, while fixed investment growth slumped to a 13-year low.

Expectations that China and Japan policy makers may do more to stimulate their economies provided added motivation for buying activity.

Turnover in the local stock market came up to some 1.5 billion shares worth S$1.2 billion with 204 counters up, 178 counters down and 403 unchanged.

It was of little surprise that United Envirotech had a pretty good day. Its share price clawed its way up after a few days of trading halt pending a big announcement and jumped 6 per cent or nine Singapore cents to S$1.605 when it resumed trading on Thursday.

The counter was the fifth most active for the day with 76 million shares worth S$121 million done after UEL said on Wednesday that Chinese conglomerate Citic was partnering KKR to scoop up a majority stake in the water treatment firm for S$1.65 a piece.

Hogging the most active spot for reasons not in its favour was Golden Agri-Resources - the counter lost four Singapore cents or nearly 8 per cent to 47 Singapore cents with 188 million shares worth S$89 million done.

Investors balked at the plantation firm's worst set of quarterly results since first-quarter 2009 as net profit plunged 86 per cent to just US$4.4 million in the third quarter ended September 2014 despite a 17 per cent topline improvement.

Given the "sharp miss" in third-quarter earnings and a potentially disappointing final quarter, OCBC Investment Research cut its core earnings estimates for the world's second largest palm oil planter by 28 per cent.

Banking stocks advanced after leading the losses on the key index over the past two days.

DBS climbed 24 Singapore cents or 1.2 per cent to S$19.50 while UOB gained 30 Singapore cents or 1.3 per cent to S$23.20. OCBC rose 6 Singapore cents or 0.6 per cent to S$10.20.

Gains in SingTel also provided support to the index, rising five Singapore cents or 1.3 per cent to S$3.90.

Japfa, which has been in the news of late for a variety of reasons, rose one Singapore cent or 1.6 per cent to 65 Singapore cents.

Evidently, Japfa investors are suitably appeased after the firm issued a statement late on Wednesday that the cows in its dairy farms in China were free of bovine tuberculosis. Fears were sparked following media reports alleging that cows in the farms of China Modern Dairy Holdings, a Hong Kong-listed firm which saw its shares beaten down, were tested positive for the infectious disease.

City Developments gained 17 Singapore cents or 1.8 per cent to S$9.53. The developer reported a net profit of S$127 million for the third quarter, up 5 per cent from a year ago on a 58 per cent rise in revenue to S$1.3 billion.

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