Singapore shares rise 0.3% with most plantation stocks seeing gains

INVESTORS continued to rotate into Singapore-listed plantation stocks on the back of rising crude palm oil (CPO) prices and falling inventory levels, which have seen the sector outperforming the broader market in recent weeks.

These agribusiness players include the Straits Times Index's (STI) Wilmar International. Its shares, which also remain supported by progress of the listing of its Chinese unit, added S$0.10 or 2.4 per cent on Wednesday to S$4.22.

Other firms benefiting from greater investor interest of late include Bumitama Agri (up S$0.02 or 2.7 per cent to S$0.765), First Resources (up S$0.01 or 0.5 per cent to S$1.86) and Olam International (unchanged at S$1.78).

However, Golden Agri-Resources faced some selling pressure, dropping 0.5 Singapore cent or 2.2 per cent to S$0.225.

On improved interest in such counters and the street expecting better profitability for most palm oil producers, DBS Group Research analysts wrote on Wednesday that it would be "good to be selective despite the hype on the CPO price rally". Among locally-listed producers, the research house likes Bumitama Agri, First Resources and Wilmar International.

According to data released on Tuesday, Malaysia's November CPO stockpile dropped 4 per cent month-on-month to 2.2 million metric tonnes (MT), less than expected as exports have weakened on higher prices. That said, the DBS analysts still expect palm oil prices to recover 19 per cent year-on-year to US$596 per MT.

On Wednesday, the STI managed to recover most of Tuesday's losses, adding 10.01 points or 0.3 per cent to close at 3,172.9 after mounting speculation that the US might delay tariffs on Chinese exports due to take effect this Sunday lifted sentiment.

Elsewhere in the Asia-Pacific, benchmark indices in Australia, China, Hong Kong, Malaysia, South Korea and Taiwan were similarly lifted by tariff delay hopes. Bucking the trend was Japan.

Trading volume in Singapore stood at 920.57 million securities, 77 per cent of the daily average in the first 11 months of 2019. Meanwhile, total turnover clocked in at S$1.02 billion, 95 per cent of the January-to-November daily average. Traders noted that the below-average volumes and turnover were mostly due to caution ahead of the US Federal Reserve meeting on Thursday.

Oanda Asia-Pacific senior market analyst Jeffrey Halley said: "With so much event risk over the next two days (the UK elections and trade deal hopes), it is no surprise that financial markets are sitting on their hands. The most significant threat is that the world is massively long the global recovery trade, predicated on an interim trade agreement."

Across the Singapore market, advancers trumped decliners 224 to 152. Of the blue-chip index's 30 counters, 10 ended in the red.