STI jumps 0.93% on US Fed tapering news; Evergrande fears ease

SINGAPORE shares rose on Thursday, echoing the rally across most major peers in the region, largely buoyed by Wall Street's overnight gains after the US Federal Reserve's slightly hawkish tilt at the much-awaited September meeting.

The key Straits Times Index rose 28.39 points or 0.93 per cent to 3,076.44, following big jumps in major US indices overnight.

Leaving the monetary policy unchanged in September, US Fed chairman Jerome Powell signalled that the central bank could begin cutting bond purchases as soon as November, with the process completed by mid-2022.

OCBC Treasury Research said in a note: "Overall, we view FOMC (Federal Open Market Committee) developments as net hawkish. Powell has given the market enough information to have a clear view of the start and pace of the tapering process, effectively making a pre-announcement."

Default fears over debt-saddled China Evergrande Group also somewhat abated; the stock shot up on the Hong Kong bourse on Thursday, and the People's Bank of China made a cash injection into the financial system.

Asian markets shrugged off Fitch's downgrade of China growth, preferring instead to focus on Moody's narrative that China will permit faster credit in the second half of 2021, said Jeffrey Halley, OANDA's Asia-Pacific senior market analyst.

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Despite the rebound witnessed across equity markets, sentiment remains shaky, with caution in the air with the debt woes of Evergrande likely to remain on the minds of investors for the rest of the week, remarked Lukman Otunuga, FXTM's senior research analyst.

Other risk events to watch out for range from the Bank of England rate decision and eurozone PMI (purchasing managers' index) surveys on Thursday and speeches from Fed officials on Friday.

On the home front, turnover came in at some 1.60 billion units worth S$1.24 billion. Gainers outpaced losers with 319 counters up and 160, down. Rises in Singapore's banking trio DBS, OCBC and UOB plus gains in CapitaLand Investment and Hongkong Land Holdings added nearly 16 index points to the STI.

Starhub rose $0.02 or 1.63 per cent to S$1.25, buoyed by the previous day's announcement that it is buying 50.1 per cent of MyRepublic's Singapore broadband business (MRB) for S$70.8 million cash, subject to several adjustments. The deal was described as a win-win by CGS-CIMB Research, given the synergies and that it is core earnings-per-share accretive.

Singtel added S$0.01 or 0.41 per cent to S$2.48. The telco said on Thursday that it will exercise its full entitlement to the rights issue of its regional associate Bharti Airtel. This translates to a total consideration of up to 29.4 billion rupees (S$545.9 million) over a period of up to three years.

Keppel Pacific Oak US Reit inched up US$0.005 or 0.65 per cent to US$0.78. RHB Research has maintained a "buy" rating on the counter, with a target price of US$0.90. The house has viewed its recent yield-accretive acquisition of two tech tenant-focused office buildings with long weighted average lease expiry (WALE) positively. It added that as more employees return to the office in the US in early 2022, it would boost leasing demand, which would be a catalyst for a re-rating.