STI climbs 0.8% buoyed by Wall Street's exuberance, potential Russia-Ukraine peace pact

SINGAPORE shares climbed higher on Monday (Mar 21) as traders digested news over the weekend of a possible Russia-Ukraine peace pact, and sentiments were buoyed by an exuberant session on Wall Street last Friday.

The key Straits Times Index extended last Friday's gains, finishing 24.88 points or 0.75 per cent higher at 3,355.51.

"Stabilising stock markets point to less cautious investors - not because views on geopolitical or policy/rates risk have improved but because price action shows a market more tolerant of those challenges," remarked Stephen Innes of SPI Asset Management.

Some optimism also stemmed from more South-east Asian nations easing travel requirements as the Covid-19 pandemic gradually shifts to an endemic stage - a potential boost for tourism in the region. The latest to ease travel rules are Indonesia and Thailand after Malaysia, the Philippines and Vietnam waived quarantine rules earlier.

Key Asian equity gauges were mixed, with Hong Kong, South Korea, Australia and Malaysia posting losses while China and Taiwan closed higher. Markets in Japan were closed for a holiday.

Amid inflation concerns, the conflict in Eastern Europe and the emergence of the Deltacron coronavirus variant, global stocks have gained 0.6 per cent over the first 3 weeks of March, with Asia-Pacific stocks declining 1.9 per cent, said Geoff Howie, market strategist at the Singapore Exchange.

Singapore's banking stalwarts DBS Group Holdings (DBS), Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB), which together comprise 45 per cent of the STI, had erased their 2022 gains by end of Mar 8 amid heightened volatility.

However, since then, the trio have averaged 10.3 per cent gains, outpacing the 6.5 per cent gains by global banks over the period, Howie noted.

One key development last week that supported the recent gains of banking stocks was a more hawkish outlook for US interest rates by the end of 2022. The US Federal Open Market Committee voted to increase the Fed funds rate by 25 basis points at its meeting last week, marking the first rate hike in more than 3 years.

Turnover in the local bourse came in at 1.73 billion units worth S$1.55 billion. Gainers outpaced losers with 286 counters up and 175 counters down.

Asia-Pacific Strategic Investments was the day's second most active with 164 million shares changing hands. The counter closed unchanged at S$0.002. The real estate developer said last Friday that it has inked a non-binding pact to acquire personal financial marketplace MoneySmart for nearly US$162 million via a reverse takeover.

Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) both drew active trading. MCT rose S$0.010 or 0.53 per cent to S$1.90 while MNACT, which was the day's most active with 197 million shares done, advanced S$0.10 or nearly 9 per cent to a 2-year high of S$1.22.

MNACT's unitholders will now have an option to receive consideration in cash from a proposed S$4.2 billion merger with MCT, said the managers of the Temasek-linked Singapore real estate investment trusts in a joint statement on Monday.