Singapore shares close higher on Tuesday but poor volume persists

LIQUIDITY has been a problem in daily trading for many months now and Tuesday's turnover of 1.5 billion units worth S$766 million was the seventh time dollar value fell below the S$1 billion mark out of the past eight sessions. The one exception was on Friday, Sept 30, when quarter-ending "portfolio rebalancing" pushed volume to S$1.1 billion.

The Straits Times Index in the meantime laboured to a 13.8 points gain at 2,884.64 with the entire market's advance-decline score amounting to 222-128, excluding warrants.

The index's rise pushed it about two points into the black for 2016 and was likely in tandem with a 40 points gain in the Dow futures but, quite understandably, most comments from brokers were aimed at the poor volume.

"Low volume creates a terrible situation of poor low begetting low volume," said a dealer. "The few clients that are still in the market are now reluctant to trade because they are afraid of being trapped and unable to exit when they want to."

Still, traders made their best of a featureless and weak day by churning the second line. At one point in the late afternoon, 19 of the 20 most active stocks posted gains - a rarity in a market reputed to offer little in the way of trading opportunities.

The average value per unit traded was S$0.51 and of the top 20 most actively traded stocks, 16 were priced below S$0.20.