Singapore stocks: STI resumes Thursday afternoon at 3,376.77, up 0.3% on day

SINGAPORE shares resumed trading in positive territory on Thursday afternoon, with the Straits Times Index gaining 8.97 points, or 0.3 per cent higher to 3,376.77 as at 1.01pm.

Gainers outnumbered losers 186 to 128, after about 727.3 million securities worth S$419 million changed hands.

Among the most heavily traded by volume, Addvalue Tech gained 17.4 per cent, or 0.4 Singapore cent to 2.7 Singapore cents, with 45.2 million shares traded, while Spackman was up 11.1 per cent, or 0.2 cent to two cents, with 29.8 million shares traded.

In addition, Genting Singapore was flat at S$0.91, with 23.8 million shares changing hands. The counter was the most traded counter among the bluechip index on Wednesday, closing S$0.025 or 2.7 per cent lower at S$0.91. This comes as investors took to selling the casino operator's stock after a JPMorgan downgrade to "underweight" with a target price of S$0.83.

Also in the spotlight were Ascendas Hospitality Trust (A-HTrust) which gained 1 per cent, or one Singapore cent to S$1.05, and Ascott Residence Trust (ART) which jumped 2.3 per cent, or three cents to S$1.31. CapitaLand also rose 0.5 per cent, or two cents to S$3.70 following the mid-day break. This comes after CapitaLand's announcement on Wednesday that it would merge ART and A-HTrust, forming Asia's largest diversified real estate player with over S$123 billion of assets under management.

OCBC Investment Research noted that consolidation within Singapore's Reit industry has intensified with ART and A-HTrust agreeing to combine.

Said OCBC analyst Deborah Ong: "We deem the terms of the merger positive for ART unitholders. We estimate that the post-transaction fair value of the merged entity should lie at about S$1.31 per unit. This assumes a 7.5 per cent valuation premium for the merged entity...

"There may be portfolio synergies for the merged entity, notably in terms of the wider range of hospitality brands available to the Reit, and the enlarged debt headroom which would increase options for funding DPU (distribution per unit) accretive acquisitions... We would recommend voting in support of the merger at ART's EGM (extraordinary meeting), which is likely to be held in October."

OCBC has maintained a "hold" rating on ART, while increasing its fair value estimate from S$1.25 to S$1.31.

Meanwhile, banking stocks traded mixed - DBS gained 0.04 per cent, or one cent to S$26.16, UOB lost 0.04 per cent, or one cent to S$26.58, and OCBC added 0.6 per cent, or seven cents to S$11.55.

Elsewhere, Asian equities also traded mixed with volumes thinned by Thursday's US holiday.

The MSCI Asia Pacific Index rose 0.4 per cent as at 12.42pm, and Japan's Topix added 0.6 per cent. Australian stocks also gained 0.5 per cent, and South Korea's Kospi was up 0.1 per cent. China's Shanghai Composite, however, lost 0.3 per cent, and Hong Kong's Hang Seng was down 0.1 per cent.

CMC market analyst Margaret Yang noted that like Singapore, the rest of Asia could see a relief rebound for the day, though weak economic outlook and ongoing geopolitical noises will likely curb excessive risk taking in the short term.

On the currency front, market watchers seem to concur that the greenback may remain slightly under threat.

Phillip Futures investment analyst Samuel Siew noted that the US dollar was on the back foot this morning, as it traded near a one-week low against the yen.

"This was largely due to falling US Treasury yields, and expectations that the Fed will cut interest rates this month, for the first time in a decade. This has been a huge shift from its previous stance, and the CME Fedwatch is indicating that it was almost certain that the Fed would slash rates by a minimum of 25 basis points during the FOMC (Federal Open Market Committee) meeting later this month.

"Thus, with expectations rising for monetary policy easing, the US dollar has remained under pressure. In addition, the US economy has shown signs of slowing and has been facing muted inflation. Thus, market focus has now shifted to non-farm payrolls data due tomorrow, and should numbers hint that growth in the US is muted, it could put more weight on the Fed justifying rate cuts."

Separately, OCBC analysts Emmanuel Ng and Terence Wu also noted that dovish overtones may continue to afflict the likes of the euro and the British pound.