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Singapore shares close higher as STI rises above 2,900 and into the black for the year
THE Straits Times Index (STI) ended 2015 at 2,882 but has risen above that level only once since, and even then it stayed there for only 10 trading sessions from April 13-26.
So Tuesday's session during which the index jumped 25.68 points or 0.9 per cent to 2,901.82 in response to Wall Street's latest all-time high was notable for being only the second time in 2016 that the STI has moved into the black for the year.
Turnover has remained roughly the same since that first crossing in April with Tuesday's trading amounting to 1.8 billion units worth S$1.1 billion compared with 1.5 billion worth S$1.4 billion done on April 13.
The reasons for the present jump into the black are a) a belief that the US economy finds itself in "Golidlocks" territory, ie not too hot to warrant an interest rate hike, and yet not too cold; and b) more money pumping from central banks like those in Japan and England.
Among blue chips, Singtel has stood out with its performance this year. Including Tuesday's S$0.08 rise to S$4.31 that came with 4.2 million shares traded, the stock has now risen 17.2 per cent in 2016 alone.
OCBC Investment Research however, downgraded the stock from "buy" to "hold" even though the broker raised its sum-of-the-parts fair value for Singtel from S$4.10 to S$4.29. Its reason was that current valuations are not attractive, adding that it would "re-engage closer to S$4".