Local stocks buck trend of red ink in the region

THE Singapore stock market defied the regional sell-off yesterday, steering a path that stayed clear of dour sentiment led by China.

The benchmark Straits Times Index (STI) climbed 17.13 points, or 0.65 per cent, to 2,666.51, following a shaky session.

Equities elsewhere in Asia took a hit. Shanghai dived 2.9 per cent to its lowest in a month, after narrowing losses from as much as 4.6 per cent during the session, while Hong Kong dropped 1.3 per cent.

Tokyo slipped 1 per cent and Seoul dipped 0.2 per cent. Sydney was flat with a tiny 0.02 per cent increase.

"There is little coming out of the G20 to suggest major improvements in the policy mix of the most systemically important countries," Mohamed El-Erian, chief economic adviser at Allianz, wrote in a Bloomberg View column yesterday.

The two-day Group of 20 meetings in Shanghai had concluded over the weekend without specific measures to boost growth.

"With little hope for major policy changes, global economic growth will continue to struggle, the trifecta of national inequality (of income, wealth and opportunity) will worsen, and financial volatility will increase."

The lacklustre sentiment mirrored that on Wall Street last Friday, which slid 0.3 per cent on worries that interest rates may rise sooner than expected.

At home, the gains came largely on the back of a jump in Jardine Matheson Holdings, which rose US$1.72 or 3 per cent to US$58.22. The stock has been included in the MSCI Hong Kong Index starting today.

Aerospace and defence conglomerate Singapore Technologies Engineering surged 14 cents or 4.9 per cent to $2.99, despite posting weaker results for the full year to Dec 31 last Friday.

CIMB Research analyst Lim Siew Khee in a report yesterday upgraded her call on the stock from "hold" to "add", noting its valuation is "starting to look attractive".

Real estate plays also did well, with CapitaLand Mall Trust adding three cents or 1.4 per cent to $2.19, and CapitaLand advancing four cents or 1.4 per cent to $2.98. Ascendas Real Estate Investment Trust (Reit) gained two cents or 0.8 per cent to $2.42.

Leading losses on the other side of the ledger was commodities trader Noble Group, which sank one cent or 2.8 per cent to 34.5 cents.

This followed news that Standard & Poor's Ratings Services has cut its long-term corporate credit rating on the company from BB+ to BB-, with a negative outlook.

"We downgraded Noble because of the company's volatile earnings and high trade risk position, as reflected in its large marked-to-market loss in 2015," said S&P credit analyst Cindy Huang. "In our view, the loss weakens Noble's credit standing and relationship with banks, despite the company's near-term refinancing risk remaining manageable."

Ezra Holdings was the day's most active counter, with 188.7 million shares changing hands. It soared 0.3 cent or 4.9 per cent to 6.4 cents.

A total of 1.51 billion shares worth $2.62 billion were traded across the bourse.

tsjwoo@sph.com.sg

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