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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."

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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.