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Singapore shares gain 1% on Tuesday ahead of key Fed meeting

INVESTORS in the local equities market took to picking up stocks in the lead-up to the two-day US Federal Reserve June meeting, which starts later in the day. Expectations of a dovish Fed are high, with the question of rate cuts not a case of whether they will be done but when.

Singapore's Straits Times Index (STI) closed at 3,238.73, rising 30.74 points or 1 per cent.

"The local market fared relatively well, trailing after Wall Street in a positive manner. Every bit of data was expected to feed into the expectations with regard to the Fed's stance this week and Monday's data releases out of the US had certainly joined the camp of supporters for dovishness," IG market strategist Pan Jingyi said.

The scene was similar elsewhere in Asia-Pacific, with Australia, China, Hong Kong, Malaysia and South Korea all posting gains. Bucking the trend, however, was Japan, with the Nikkei 225 dropping 151.29 points or 0.7 per cent to 20,972.71.

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In Singapore, trading volume clocked in at 1.47 billion securities, 23 per cent over the daily average in the first five months of 2019. Total turnover came to S$1.19 billion, 14 per cent of the January-to-May daily average. A dealer commented that he was surprised by the good volume and turnover in the market.

Across the market, advancers trumped decliners 228 to 148. Just four of the STI's 30 components closed in the red.

Real estate investment trusts (Reits) and property developers, which are among the main beneficiaries of lower borrowing costs, continue to be in favour. CapitaLand Commercial Trust units added four Singapore cents or 1.9 per cent to S$2.11 while UOL was S$0.13 or 1.8 per cent up at S$7.28.

Financials raced away. DBS Group Holdings closed S$0.13 or 0.5 per cent up at S$24.80. OCBC Bank gained S$0.15 or 1.4 per cent at S$10.95 while United Overseas Bank finished at S$25.60, advancing S$0.49 or 2 per cent.

Telecom stocks continued their upward trend, led by NetLink NBN Trust. The business trust, which has a significant domestic market share in fibre network infrastructure, saw its units add one Singapore cent or 1.1 per cent to S$0.88 on 31. 6 million shares.

NetLink's recent rally also presented an opportunity for investors to take profit. In a note to clients, remisier Ernest Lim said that those who wished to could consider taking profit on NetLink in tranches. Analysts also told The Business Times that NetLink has hit overbought territory.

Among pennies, shares in e-commerce and data analytics firm Y Ventures closed up 3.5 Singapore cents or 34.3 per cent at 13.7 cents.

The Catalist-listed firm was queried by the Singapore Exchange for "unusual price movements" in its shares after the counter surged in morning trade. The company has since told the bourse operator that it was unaware of any reasons or information that could explain the increase in share price or trading volume. Y Ventures also confirmed that it is in compliance with listing rules. 

Tuesday also saw the listing of Malaysia-headquartered producer of energy-saving products TrickleStar on the Catalist board. It opened at 26.5 Singapore cents, up 1.9 per cent from its initial public offering (IPO) price of 26 cents. The counter eventually closed at 34 cents. With a market capitalisation of about S$21.3 million, TrickleStar's listing brings the total number of companies listed on the Catalist board to 218.