Singapore shares post slight rise of 0.2% on Wednesday

HOPES that a US-China "Phase One" trade deal would be a reality before year's end saw most Asian equities rise on Wednesday despite China's industrial profits falling at their fastest pace in eight months in October.

Singapore's Straits Times Index (STI) turned in a positive showing after two straight sessions of losses to finish 7.68 points or 0.2 per cent higher at 3,215.53.

Like the local market, traders noted that regional investors preferred to feed off the positive developments like US President Donald Trump's admission that negotiators were in the "final throes" of a trade deal and the US Federal Reserve likely keeping rates on hold in the near future. Australia, Hong Kong, Japan, Malaysia, South Korea and Taiwan all managed gains.

On the other hand, China's Shanghai Composite Index dipped 3.87 points or 0.1 per cent to 2,903.19 after a 9.9 per cent decline in October's factory profits.

"Asia itself has taken President Trump's 'final throes' comment to heart, with Asian indices mostly higher except for mainland China," Oanda's Asia-Pacific senior market analyst Jeffrey Halley said.

That said, observers noted gains on most regional indices appeared capped, with FXTM market analyst Han Tan of the view "upward momentum for riskier assets is at risk of petering out, with investors perhaps needing stronger motivation beyond mere feel-good rhetoric regarding the potential US-China trade truce".

Mr Tan added that markets can "only ignore the dismal economic data for so long", especially after China's disappointing industrial print on Wednesday.

Attention is likely to turn to Dec 15 when Mr Trump is set to hit Beijing with tariffs on US$160 billion worth of imports to the US. One can only hope a deal will be sealed by then.

In Singapore, trading volume stood at 1.34 billion securities, 16 per cent over the daily average in the first 10 months of 2019. Meanwhile, total turnover clocked in at S$1.28 billion, 22 per cent over the January-to-October daily average.

Across the market, advancers outpaced decliners 172 to 165. The blue-chip index had 10 of its 30 counters in the red.

Golden Agri-Resources was the STI's most active counter, closing one Singapore cent or 4.8 per cent higher at 22 cents with 173.1 million shares changing hands. The counter has seen consecutive days of high trading volumes since it got dropped from the MSCI Singapore Index. Mapletree Commercial Trust, which replaced Golden Agri, dropped six Singapore cents or 2.5 per cent to S$2.37 on Wednesday.

Singtel saw heavy trading too, adding three Singapore cents or 0.9 per cent to S$3.31 with 33.4 million shares traded.

In the past week, institutional investors were top net buyers of the telco, while retail investors were top net sellers. "The renewed interest by institutions is largely due to Singtel's Indian associate Bharti Airtel's move to hike phone plan prices next month," a remisier told The Business Times.

In the second line, Straco Corp shares dropped 3.5 Singapore cents or 4.9 per cent to close at 68.5 cents after the mainboard-listed company said it has suspended operations of The Singapore Flyer since Nov 19 following a technical issue involving one of the spoke cables.

This is not the first time Straco, which operates other attractions like Underwater World Xiamen and Shanghai Ocean Aquarium, has faced such issues pertaining to the Flyer. Operations were suspended in January 2018 for two months. This weighed on Straco's full-year earnings, which fell 12.4 per cent to S$41.8 million for fiscal 2018.