singapore shares gain 0 5 per cent post budget as investors scoop up blue chips 244352015

Investors pushed up Singapore’s benchmark index nearly half a percent higher on Tuesday as they bought up leading blue chips in the banking, maritime and telecom sectors following budget proposals that focused on long-term benefits for Singapore.

Uncertainty arising from the failure of Greece to put forward its reform proposals on Monday, as well as the overhang of Fed chair Janet Yellen’s testimony before Congress, scheduled to commence on Tuesday, did not deter investors from picking up bargains in the new Year of the Goat.

Indices and sectors

The Straits Times Index (STI) ended 16.31 points higher or +0.48 per cent to 3,437.61, taking the year-to-date performance to +2.15 per cent. The FTSE ST Mid Cap Index gained +0.12 per cent, while the FTSE ST Small Cap Index gained +0.27 per cent.

The Singapore Exchange traded 1,074.9 million shares valued SG$1,247.2 million. Gainers outnumbered losers by 226/194.

Amongst the FTSE ST sectors, the top gainers were telecommunications (+2.58 per cent), basic materials (+1.66 per cent), maritime (+1.39 per cent) and China Top Index (+0.94 per cent). Figuring in the losers’ list were industrials (-0.56 per cent), consumer goods (-0.44 per cent), technology (-0.36 per cent) and healthcare (-0.21 per cent).

Stocks

The Singapore share market was boosted by upward movements in key stocks. Singapore Telecommunications Ltd (SGX:Z74) gained 2.89 per cent to SG$4.280. All the three major banks ended in the black. DBS Group Holdings Ltd (SGX:D05) was up 0.61 per cent SG$19.77, Oversea-Chinese Banking Corp Ltd (SGX:O39) gained 0.47 per cent to SG$10.61, and United Overseas Bank Ltd (SGX:U11) was up 0.26 per cent to SG$22.96.

ComfortDelGro Corporation Ltd (SGX:C52) shot up 3.81 per cent to SG$3.00, boosted by the Finance Ministry’s budgetary plans for major reinvestment in Singapore’s infrastructure including its public transport systems.

Great Eastern Holding Ltd (SGX:G07) ended higher by 0.60 per cent at SG$25.25.

Overseas Education Ltd (SGX:RQ1) gained 1.27 per cent to SG$0.800 despite the company reporting that profit dipped 2.8 per cent to SG$22 million for the full year ended December 31, with revenue down 0.9 per cent to SG$102.1 million due to weak enrolments in junior school, according to the Straits Times.

Trek 2000 International Ltd (SGX:5AB) plunged 8 per cent to SG$0.345 even though the company said net profit more than doubled to US$2.5 million (SG$3.1 million) on the back of revenues that climbed 52.8 per cent to US$112.9 million. The company said the higher turnover was driven by increased demand for its thumb drives, security solutions and SD cards, according to the Straits Times.

NSL Ltd (SGX:N02) said that profit from its continuing operations declined 6 per cent to SG$8.7 million, though revenue rose 1 per cent to SG$426 million. The company incurred losses in its precast and prefabricated bathroom unit division, said the Straits Times.

Wheelock Properties (Singapore) Ltd (SGX:M35) ended down 0.53 per cent to SG$1.80 after the company reported that it had set aside an allowance for the diminution in value of SG$75 million on its Fuyang project in China. It also reduced its assessment of the fair value of its Singapore project Scotts Square Retail by SG$52 million to SG$260 million.

Hotel Properties Ltd (SGX:H15) was higher by 0.24 per cent to SG$4.12, though the company said its profit declined 30 per cent to SG$124.4 million for the year ended December 31, down from SG$177.6 million in the previous year. Revenue plunged 11 per cent to SG$614.6 million.

Magnus Bocker, CEO of the Singapore Exchange, is not renewing his contract with the exchange and will leave by end-June, according to The Business Times. "There is a time and season for everything, and it is now time for me to take on new challenges," Mr Bocker said in a statement yesterday. The Board of Directors of the exchange has hired executive search firm Spencer Stuart to help locate a replacement candidate.

Economic news, currency and insight

According to analysts, the new Year of the Goat may prove auspicious for investors, given that economic growth in the US and monetary policy easing in many countries across the globe are likely to make stocks attractive over the next few months, says an article in AsiaOne.

"Notwithstanding the risk of a correction – potentially as the Fed eventually moves to raise interest rates – the broad trend in shares is likely to remain up," AMP Capital chief economist Shane Oliver said in a research note. "Economic growth is continuing and monetary policy is set to remain easy, with further easing in Europe, Japan, China and Australia and only a gradual tightening in the US. (Hence), share markets are likely to see another year of reasonable returns."

Overnight, The Dow and S&P 500 Tuesday surged to fresh record highs after Federal Reserve Chair Janet Yellen signalled a cautious approach to raising interest rates. The Dow Jones Industrial Average rose 92.35 points (0.51 per cent) to 18,209.19, the S&P 500 gained 5.82 points (0.28 per cent) at 2,115.48, while the tech-laden Nasdaq Composite Index advanced 7.15 points (0.14 per cent) to 4,968.12.

"If economic conditions continue to improve, as the Committee anticipates, the Committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis," Fed chair Janet Yellen said in testimony before a congressional committee on Tuesday. "Before then, the Committee will change its forward guidance. However it is important to emphasise that a modification of the forward guidance should not be read as indicating that the Committee will necessarily increase the target range in a couple of meetings."

Eurozone finance ministers gave the green light for a bailout extension for Greece after considering the latter’s reform push in a conference call, reported the Straits Times. Slovak Finance Minister Peter Kazimir said in a tweet: "Eurozone deal with Greece reached on Friday holds. Greeks have lots of heavy lifting to do until end-April. We all want to see numbers now."

Macau’s appeal as a gambling destination received a fresh blow when a senior official said the city would like to study restrictions on mainland Chinese tourists to ease overcrowding, reports the Straits Times. Secretary for Social Affairs and Culture Alexis Tam Chon Weng said on a radio talk-show that the government would approach the Chinese central government in a bid to analyse Macau’s capacity for visitors and whether too many tourists were impacting local residents’ quality of life.