Singapore shares rise 0.5% on Tuesday as bargain hunters move in

A BARGAIN-HUNTING session brought the Straits Times Index up 16.04 points or 0.51 per cent to 3,158.24 on Tuesday, following a sell-off at the start of the week as Covid-19 cases soared in South Korea and Italy over the weekend.  

Advancers outnumbered decliners 237 to 197 after about 1.62 billion securities worth about S$1.32 billion changed hands.  

With the jury still out on how long Covid-19 will last, traders are trying to figure out what level of risk alert the market should be on, according to Stephen Innes, chief market strategist at AxiCorp.

But with the uncertainty surrounding the full extent of the economic impact on the back of travel bans and airline suspensions, "traders are finding it more uncomplicated to toggle risk-off rather than on", he said.

Among the actively traded stocks included ST Engineering, which advanced S$0.22 or 5.24 per cent to S$4.42 on a cum-dividend basis. This comes after the company on Monday posted a 36.2 per cent rise in its Q4 net profit to S$169.5 million.

RHB Securities has since raised its target price from S$4.55 to S$4.90 and maintained a "Buy" call on the stock.

ST Engineering is well-positioned to deliver a 10 per cent profit growth in 2019 to 2022 on the back of "a record-high order book, contributions from new acquisitions, and through continuing investments to expand its capabilities in aerospace and electronics", noted the RHB Securities report.

The report also pointed out that "the diversified, defensive nature of its business should enable ST Engineering to weather the near-term impact of the Covid-19 outbreak".

Banking stocks closed in the green after Monday's sell-off as investors look to buy into dips for dividend-yielding plays.

While analysts expect FY20 revenues of banks to be impacted by Covid-19 as they keep a tight rein on costs, the sector should see some support from dividend yields, according to a DBS report. 

DBS gained S$0.08 or 0.32 per cent to S$24.93, United Overseas Bank rose S$0.12 or 0.48 per cent to S$25.40, while OCBC Bank edged up S$0.05 or 0.46 per cent to S$10.97.

Among the decliners was Singapore Airlines, which fell 0.24 per cent to S$8.46. This came as the national carrier introduced a hiring freeze and contemplates other cost-cutting measures amid the outbreak.

Other stocks most heavily traded by volume included Yangzijiang Shipbuilding, which closed at S$1.01 with 23.9 million shares traded, while Genting Singapore ended at S$0.86 on a trade of 37.9 million shares.

The Singapore bourse's performance was in line with some regional markets, including Malaysia, South Korea and Hong Kong.