singapore stocks end higher on wall street effect 534462015

Singapore stocks on Monday were beneficially impacted by Friday’s strong show on Wall Street as the Nasdaq Composite and S&P 500 chalked up record high closes. Strong gains in Singapore Telecom and UOB helped boost the local bourse, though fresh worries regarding a Greek default, which negatively impacted European shares, took some of that shine off in the late trading.

Indices and sectors

The Straits Times Index (STI) ended 2.85 points or 0.08 per cent higher to 3,515.85, taking the year-to-date performance to +4.48 per cent.

The FTSE ST Mid Cap Index gained 0.70 per cent, while the FTSE ST Small Cap Index rose 0.73 per cent.

The Singapore Exchange traded a volume of 1,779 million shares valued at SG$1271.5 million. Gainers outnumbered losers by 258/200.

Amongst the FTSE ST sectors, the biggest gainers were basic materials (+2.97 per cent), maritime (+2.25 per cent), utilities (+2.18 per cent), China Top Index (+1.93 per cent) and telecommunications (+1.47 per cent). The biggest losing sectors were real estate investment trusts (-0.43 per cent), consumer services (-0.21 per cent), industrials (-0.17 per cent) and oil and gas (-0.16 per cent).

Stocks

DBS Group Holdings Ltd (SGX:D05) reported a 10 per cent jump in its core first-quarter net profit, surpassing analysts’ estimates and led by strong growth in loans and wealth management fees, according to Straits Times. CEO Piyush Gupta revealed that the bank’s first quarter China trade related loans fell SG$7 billion on a quarter on quarter basis due to lower commodity prices and the shrinking differential between onshore and offshore interest rates.

Demand from major corporate borrowing as well as consumer credit boosted loans by 11 per cent during the quarter. Excluding exceptional items the bank reported a core net profit excluding exceptional items of SG$1.13 billion, while analysts expected SG$1.03 billion, and compared with SG$1.03 billion in the prior year period. "Despite a slowdown in trade volumes, the bank's first-quarter earnings reached a record high," said Gupta.

Lenders "will benefit from the rising interest-rate environment," Ivan Tan, a Standard & Poor's analyst in Singapore, said before the results, as quoted by Straits Times. "Impacts will be much more prominent from the second quarter."

Frasers Centrepoint Ltd (SGX:TQ5) announced a transaction to sell its 357 Collins Street, Melbourne office tower to its affiliated Frasers Commercial Trust (SGX:ND8U)  (FCOT) for SG$222.5 million. The tower formed a part of Australand’s SG$3 billion commercial property trust. Frasers Centrepoint acquired Australand for SG$2.6 billion last year. “This will complement and diversify FCOT’s exposure from its existing portfolio in Perth and Canberra in Australia,” said chief executive of fund manager Low Chee Wah, as quoted by The Australian. “With Collins Street being regarded as a prime office location in the Melbourne CBD, good connectivity and Grade A specifications of the property, 357 Collins Street is set to be a strategic addition to FCOT’s portfolio.”

Separately, Frasers Commercial Trust (SGX:ND8U) (FCOT) said it had entered into a long lease agreement at a cost of SG$44.8 million with Frasers Centrepoint Ltd (SGX:TQ5) to develop a 16 storey hotel at China Square Central. FCOT said the development of the hotel will revitalise China Square Central and reposition it as an integrated development, according to Straits Times.

Sembcorp Marine Ltd (SGX:S51) said its first-quarter net profit slumped 13.6 per cent on weakness in its rebuilding business due to the fall in global crude prices. Net profit during the three months ended March 31 was down to SG$105.9 million from SG$122.5 million in the prior year period, while turnover fell 2.4 per cent to SG$1.3 billion, according to TODAY. “The ongoing cutback in global exploration and production expenditure has resulted in the scarcity of new orders for the industry this year,” said Sembcorp Marine, the world’s second-largest oil rig builder. “Customers strive to conserve cash and consolidate their offshore fleet operations as charters are not renewed or are renewed at significantly lower rates.”

Shares in Otto Marine Ltd (SGX:G4F) fell to a two week low of 3.8 cents after the company admitted that it was facing a winding up petition by a creditor who was owed SG$1.57 million.

Aztech Group Ltd (SGX:560) said net profit during the first quarter ended March 31 fell 27.5 per cent year-on-year to SG$1.22 million due to higher expenses related to start-up costs. First-quarter revenue was SG$85.59 million, and gross profit earned was SG$7.85 million down 7.8 per cent from the prior year period, as reported by Straits Times.

Sing Investments & Finance Limited (SGX:S35) said first-quarter net profit dropped 31.2 per cent to SG$2.6 million, despite revenue growing by 7.7 per cent to SG$13.6 million. Net profit dropped because the 7.7 per cent increase in interest income and hiring charges was more than offset by the sharp 34.1 per cent jump in interest expenditure, according to Straits Times.

Raffles Medical Group Ltd. (SGX:R01) said first-quarter net profit rose 2.9 per cent SG$14.98 million, due to higher revenues from increased patient load, which was somewhat offset by higher staff costs and depreciation. Group revenue jumped 8.5 per cent to SG$95.02 million, and earnings per share for the quarter rose to 2.65 cents from 2.60 cents in the prior year period. The company said "the more measured pace of economic growth in the region and Singapore may have a dampening effect on healthcare demand," according to Straits Times.

United Overseas Bank Ltd (SGX:U11) rose 1.42 per cent to close at SG$25.05, an all-time high, after trading a high volume of 3.0 million shares.

EMS Energy Limited (SGX:5DE) said Friday that it planned to merge with EPCM player Koastal Pte Ltd. and its subsidiaries (the Koastal Group) in a SG$150 million stock-and-cash transaction. According to the company, the transaction will transform the enlarged group into an integrated offshore and marine (O&M) services provider which can provide manufacturing and fabrication for larger and higher-value projects, said an article in Rigzone.

Economic news, currency and insight

The latest MasterCard Financial Literacy Index released yesterday found that Singapore consumers are finding it difficult to keep up with their bills, create effective budgets and manage unsecured borrowings, according to TODAY. As a result, Singapore dropped on the Literacy Index from second to sixth place – the largest decline amongst the 16 Asia-Pacific markets surveyed in the study. MasterCard clarified that the decline in Singapore’s financial literacy was primarily due to a lack of understanding of basic money management.

On Wall Street Monday, disappointing news out of several healthcare and biotech companies caused a sharp drop in the NASDAQ Biotech and the S&P Healthcare indices, weighing down the overall sentiment and leading to a down day for US stocks, according to Reuters. The Dow Jones Industrial Average fell 42.17 points, or 0.23 percent, to 18,037.97, the S&P 500 lost 8.77 points, or 0.41 percent, to 2,108.92 and the Nasdaq Composite dropped 31.84 points, or 0.63 percent, to 5,060.25.

On Wednesday, the US Federal Open Market Committee will conclude its monetary policy meeting and is likely to take note of a slowdown in US growth as well as an escalation in the Greek financial crisis. Given these factors, analysts say the Fed may choose to be reticent on an interest rate hike.