Singapore shares close 0.2% up on upbeat data, widening vaccine rollout

SINGAPORE shares closed higher on Monday, buoyed by record highs on Wall Street last Friday, a hopeful pace of vaccine rollout and signs of easing pandemic pain in the world.

The key Straits Times Index finished at 2,931.52 after advancing 6.04 points or 0.21 per cent.

Key gauges in Japan, South Korea, Australia and Malaysia kicked off the week on a positive note, posting gains at close as well. US markets are shut on Monday for Washington's Birthday holiday, while Hong Kong, mainland China and Taiwan remain closed for the Chinese New Year holiday.

"There's a robust risk-on tone in markets today... the probability of a large and swift fiscal package by mid-March has just gone up substantially," said Axi's chief global market strategist Stephen Innes.

With the impeachment trial of former US president Donald Trump over, there are expectations that the Democrats would be more focused on the proposed stimulus package, which could explain the upbeat mood in financial markets. Major US equity indices closed at all-time highs last Friday as daily infections fell to three-month lows.

At home, some key macro data was released. The Ministry of Trade and Industry on Monday announced that it is maintaining Singapore's gross domestic product (GDP) growth forecast at 4-6 per cent for 2021 after an improved earlier estimate for last year's GDP.

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For 2020 as a whole, the Singapore economy contracted by 5.4 per cent, a reversal from the 1.3 per cent growth recorded in 2019 and slightly better than the advance estimate of a 5.8 per cent contraction.

Oxford Economics said in a note that it expects Singapore's growth momentum to remain solid in 2021 given an improved external outlook, supported by stronger growth in China and the US this year.

On the local bourse, turnover stood at 2.50 billion worth S$1.09 billion. Gains were led by OCBC, Wilmar International and Singtel.

DBS fell 19 Singapore cents or 0.73 per cent to S$25.88. Phillip Securities has an "accumulate" rating on the stock with a target price of S$29.50 on higher earnings expectations on the back of lower allowances on an improving credit outlook.

Shares of AEM Holdings surged 32 Singapore cents or 7.44 per cent to S$4.62. The electronics services provider said on Monday that it received am in-principle nod from the Singapore Exchange (SGX) for the listing and quotation of new shares on Saturday, a pre-condition for its S$99.7 million buy-out offer for CEI.

CEI gained seven Singapore cents or 6 per cent to S$1.23. Trading in both counters were halted in the morning pending the announcement and resumed trading very soon after.