STI closes 0.7% up as traders buy the dip

SINGAPORE shares closed higher on Tuesday, displaying impressive resilience with the key barometer staying above water for much of the day.

The key Straits Times Index advanced 21.47 points or 0.71 per cent to 3,063.20, even as contagion worries heightened over debt-roiled property giant China Evergrande Group and spooked investors across the region.

The gains were partly owing to traders buying the dips given recent losses in the local market on the back of expectations of the US central bank's tapering, rising Delta variant cases and global macro concerns.

Asian markets fared mixed with mainland China and South Korea closed today. All key US stock gauges had closed lower overnight on Monday.

Japan, which was closed on Monday, played catch up with the broadly dampened sentiments, and fell more than 2 per cent. After a torrid start to the week, Hong Kong stabilised and finished 0.5 per cent higher. Malaysia and Australia finished higher by 0.2 and 0.4 per cent respectively.

Worries over the debt woes engulfing Evergrande and its potential domino effect heightened with some market observers even drawing comparisons with US' Lehman Brothers collapse.

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Mainland China remains on holiday until tomorrow. Jeffrey Halley, Asia Pacific senior market analyst at Oanda remarked in a note: "The China holiday has left financial markets to ruminate on possible outcomes and worries about interlinked 'contagion'. Luckily for the world, China's government will return to work tomorrow..."

A statement by the chairman of the indebted firm that the developer "will walk out of our darkest moment" and deliver property projects, provided some reassurance.

Rob Carnell, ING's regional research head said in a note: "In the very short term, the easiest concrete measures that are likely to be taken are more PBOC (People's Bank of China) liquidity injections. These, and the government's strong control over the banking system strongly suggest that a sudden liquidity loss like we witnessed during the global financial crisis, should be avoided."

On the home front, turnover came in at some 1.48 billion units worth S$1.47 billion. Gainers outpaced losers with 298 counters up and 186, down.

Singapore's three largest aviation stocks saw relief gains on big news that the US will soon open travel to vaccinated travellers with a negative Covid-19 test. C6L rose S$0.17 or 3.54 per cent to S$4.97; S59 was up S$0.06 or 2.99 per cent to S$2.07 while S58 : S58 0% jumped S$0.14 or 3.6 per cent to S$4.03.

"Today's announcement is a major step forward. Allowing access to the US for those vaccinated will open travel to the US for many who have been locked out for the past 18 months," said Willie Walsh, director general of Iata (International Air Transport Association).

8YY : 8YY 0% gained S$0.107 or 84 per cent to S$0.235. It was one of the day's most actively traded with some 39 million shares worth S$7.8 million done. The Catalist-listed medtech firm said on Monday that it is allowed to market and sell its new product - a test that can detect a person's protective immunity against Covid-19 - in the European Union.

BS6 : BS6 0% fell S$0.01 or 0.69 per cent to S$1.43. The debt woes of embattled Evergrande, Beijing's regulatory crackdown on education and tech sectors plus expectations of a decline in container freight rates have all been weighing on the counter over the past week.

CGS-CIMB Research highlighted in a note that the firm has no exposure to Evergrande and that its management is "active in managing its credit risks given its acute understanding of borrowers' background as well as the business environment in China".

Real estate investment manager 9CI : 9CI 0% which made its debut on Monday, closed S$0.21 or 7.12 per cent up at S$3.16. Morgan Stanley described the counter as "underappreciated" and "deeply undervalued" despite being the third-largest listed real asset manager in the world. The house has given the stock a sum-of-the-parts price target of S$3.75 with an overweight rating.