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STI closes 28.71 points up at 2,648.90; key property stocks chart gains

AMID mixed sentiment across the region and a sombre kick-off to the Q2 reporting season in the US market, the local market benchmark Straits Times Index ended Wednesday at 2,648.90, up 28.71 points or 1.1 per cent.

Only four of the STI’s 30 component stocks were down for the day. Among the key index gainers were the leading property counters - UOL Group, City Developments (CDL) and CapitaLand, which ended the day up 2.96 per cent, 2.66 per cent and 2.11 per cent respectively.

While the ongoing Covid-19 pandemic does not bode well for residential property sales, hotel occupancy rates or commercial rents, these stocks are widely seen by analysts to still offer decent value for long-term investors.

In fact, OCBC Investment Research said on Wednesday that it is maintaining its recommendation to buy shares in CDL, which recently warned that its H1 2020 pre-tax profit would be substantially lower than last year. The research house sees “deep value” in the stock, even though it has cut its fair value for the counter to S$10.74 from S$12.01 previously.

Sentiment was not all that positive across the broader market though, with advancers outnumbering decliners by only 251 to 226.

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Many healthcare and pharmaceutical plays that have seen heavy trading recently ended the day lower. Among them were iX Biopharma and Hyphens Pharma International, which ended the day down 9.52 per cent and 12.5 per cent respectively.

Around the region, the Shanghai Composite Index was down 1.56 per cent, while the Hong Kong’s Hang Seng Index ended the day 0.01 per cent higher. Korea’s Kospi Index was 0.84 per cent higher.

Closer to home, the key market benchmarks for Kuala Lumpur and Jakarta were down 0.82 per cent and 0.07 per cent respectively, while Bangkok’s main barometer was up 0.99 per cent.

In the US, the S&P 500 Index charted an overnight gain of 1.34 per cent. However, while the reaction to the earnings reports of major US banks like JP Morgan and Wells Fargo was mixed, their managements warned of a tough operating outlook ahead.

Johanna Kyrklund, chief investment officer and global head of multi-asset investment at Schroders, said in a research note: “As we head towards the autumn, complacent investors may get a wake-up call. The furloughing of staff may be masking some of the negative effects of the lockdown, and as furlough measures are removed, job losses are likely to accelerate.”

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