STI closes 1.04% higher on Thursday; YZJ among top actives

THE Straits Times Index (STI) rose for a third straight day to close 1.04 per cent or 26.41 points higher at 2,559.10 on Thursday, buoyed by positive updates on the Covid-19 vaccine front and speculation over the progress of a US stimulus package.

About 1.63 billion securities worth S$1.32 billion changed hands on Thursday. Gainers outnumbered losers 238 to 193.

DBS Research analysts wrote in a note on Thursday: "We think the despair phase of this Covid-19 bear market started on June 10, when the STI was at 2,800. This is typical of the last phase of the bear market, characterised by worsening headline news, earnings losses, 'no end in sight' negative sentiment and investors' disinterest in stocks. Historically, the stock market bottoms when GDP contraction is at its steepest. This is likely to have occurred in the second quarter... We expect a gradual recovery going forward."

Shares of local banks perked up on Thursday after DBS Group reported a second quarter net profit that was slightly ahead of expectations; United Overseas Bank's earnings, however, missed expectations.

DBS shares rose 2.87 per cent to S$20.40. UOB rose 1.75 per cent to S$19.76 as punters took heart in the bank's conservative provisioning, while OCBC Bank rose 1.85 per cent to S$8.80.

Yangzijiang Shipbuilding (YZJ) gained 3.5 Singapore cents or 3.74 per cent to S$0.97 on volume of 50.2 million after it reported that yard activity had returned to full capacity in the second quarter, following the lifting of lockdown measures.

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Citi analyst Kwok Wei Chang has a target price of S$1.35 for YZJ: "Current valuations at eight times price-to-earnings and 0.6 times price-to-book provide an attractive entry point. Moreover, YZJ is set to see a catch-up in earnings in the second-half, while boasting superior fundamentals to regional shipyards amid global headwinds."

Top active QT Vascular rose 0.1 Singapore cent or 16.67 per cent to S$0.007, on volume of 102.6 million.

Wilmar International, Tuan Sing Holdings, QAF and Accordia Golf Trust have called for trading halts.

The Hang Seng Index fell 0.69 per cent, the KLSE climbed 1.30 per cent. The Shanghai Composite rose 0.26 per cent, and the Nikkei fell 0.43 per cent.

Oil prices edged higher into the US$45-per-barrel range after a larger-than-expected decline in US crude inventories was reported