STI slips ahead of US data

STI slips ahead of US data
A China Railways CRH3 high-speed train. Midas Holdings is expected to benefit from China's stimulus measures, which are tipped to lead to a boom in railway construction and railway investments.

SINGAPORE - Singapore stocks took a breather yesterday, ending lower following a week of strong gains, with investors awaiting non-farm payroll data from the United States.

The key job data, due out last night, is expected to provide further clues to the pace of stimulus tapering by the US central bank.

The benchmark Straits Times Index shed 7.34 points to 3,212.72 yesterday, but was up 1.26 per cent for the week.

"Investors seem to sidestep the market as the non-farm payroll report draws near," CMC Markets analyst Kenny Kan said.

The Federal Reserve's decision to start winding down its stimulus programme from January - citing improvements in the economy - hit world markets as investors repatriated their cash to the US in expectations that interest rates will begin to rise.

Further improvements in the US economy are likely to lead to speculation that the Fed might speed up this process.

Local banks were among the top active stocks on the Singapore bourse yesterday.

United Overseas Bank slipped 0.6 per cent or 14 cents to $21.70, on 3.67 million shares traded.

DBS Group Holdings edged up 0.2 per cent or four cents to close at $16.55, with nearly three million shares done, and OCBC rose 0.5 per cent or five cents to close at $9.71, on 3.6 million shares traded.

SingTel lost 0.5 per cent or two cents to $3.65, with 15.5 million shares changing hands.

Noble Group fell 2.66 per cent or 3.5 cents to $1.28, on volume of 35.1 million shares.

OCBC Investment Research said yesterday that China's unveiling of proposed stimulus measures to support the economy and help the country hit its economic growth target of 7.5 per cent this year was positive for Midas Holdings.

As a result, it upgraded the stock to "buy".

The stimulus measures unveiled by Beijing include the construction of railways. "The important focal point is that the rail transport industry outlook remains buoyant," DBS said.

"Other railway initiatives include encouraging banks and other financial institutions to actively support railway construction projects, and strengthening oversight to ensure the acceleration of railway construction and steady increase in railway investments."

Midas shares gained 2.2 per cent or one cent to 46.5 cents, with 20.4 million shares changing hands.

A subsidiary of Midas has already won contracts to supply material for railways in China.

Among penny stocks, there was notable activity in China water treatment firms including HanKore, SIIC Environment and United Envirotech.

HanKore shares were up 2.3 per cent or 0.3 cent to 13.3 cents, with 126.6 million shares changing hands, while SIIC shed 0.6 per cent or 0.01 cent to close at 16.5 cent, with 7.2 million shares traded.

United Envirotech shares gained 2.12 per cent or three cents to $1.45, with 2.56 million shares changing hands.

gleong@sph.com.sg

This article was published on April 5 in The Straits Times.

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