singapores straits times index jumps 2 per cent on global cues 1496932015

Singapore stocks surged higher Monday in tandem with Asian equity markets that turned bullish on speculation of a delay in the interest rate hike by the US Fed.

A weak jobs report out of the US on Friday has fanned worldwide hopes that the rate hike will not happen any time soon. Asian bourses were also upbeat on the prospects of the Pacific trade pact finally becoming a reality. Commodities received a sentiment booster from the massive jump in Glencore, which was up over 70 per cent at one stage, on the Hong Kong stock exchange.

China-focused FTSE sectors were the top gainers in Monday’s trading, as investors nursed hopes of stimulus moves from the country’s regulators.

Indices

The Straits Times Index (STI) ended 58.1 points or 2.08 per cent higher at 2,851.25, taking the year-to-date performance to -15.27 per cent.

The FTSE ST Mid Cap Index gained 1.45 per cent, while the FTSE ST Small Cap Index rose 1.04 per cent.

The Singapore Exchange traded a volume of 1,146.2 million shares valued at SG$888.8 million. Gainers outnumbered losers by 297/121.

Amongst the FTSE ST sectors, the gaining sectors included China (+3.05 per cent), China top index (+2.73 per cent), telecommunications (+2.62 per cent), consumer goods (+2.55 per cent), utilities (+2.53 per cent), oil and gas (+2.34 per cent) and real estate holding and development (+2.24 per cent). Fledgling (-0.47 per cent) was the only sector to end in the red.

Stocks

Singapore Exchange Limited (SGX:S68) has launched its new SGX Index Edge business that will create indices and offer index services to asset managers, investors and issuers, the Business Times reported.

Tea retailer OSIM International Ltd. (SGX:O23) rose 1.23 per cent to SG$1.64. Investors appeared to have brushed aside the reports on the Hong Kong media regarding excessive pesticide residue found in a batch of the company’s TWG Tea that was sent to Taiwan, according to the Business Times.

Most analysts appear to hold the view that Yoma Strategic Holdings Ltd (SGX:Z59) would benefit if it divested its 25 per cent stake in a Myanmar telecom tower company to a unit of Malaysian telco Axiata Group, following in the steps of its larger JV partner, the Digicel Group.

Miyoshi Ltd (SGX:M03) rocketed 32.08 per cent to SG$0.070. The precision engineering firm Miyoshi has signed a memorandum of understanding (MOU) on a joint venture (JV) with Fujian-based light electric car firm Core Power Group, the Business Times reported.

Economic news

The Trans-Pacific Partnership, or TPP, was finally agreed upon on Monday (October 5) after more than five years of negotiations. The comprehensive trade agreement, which creates the world’s largest free-trade region, will tie Singapore to 11 other countries, including access to large economies such as the US and Japan. "The TPP embodies what Singapore sees as the future of the Asia Pacific," said Trade and Industry Minister Lim Hng Kiang, as quoted by Channel News Asia. "It will transform the region by reducing tariff and non-tariff barriers substantially for both goods and services, encouraging greater investment, and addressing new trade challenges in the modern economy.”

Credit Bureau Singapore said Monday that consumers’ outstanding unsecured debt continued to trend higher in the first half of 2015. The bureau found that the number of consumers who missed two or more months of unsecured debt payments jumped 10 per cent compared to the prior year period, and 32 per cent compared to 2011. Overdue balances rose 7 per cent compared to the previous year, and 74 per cent over 2011. Analysts attributed the development to rising interest rates, a weak job market and an economy teetering on the edge of recession.

On Wall Street Monday, stocks continued their upward trend led by expectations of a delay in an interest-rate hike by the US Fed, as well as a jump in oil prices that helped boost the energy sector. The Dow Jones Industrial Average rose 304.06 points, or 1.85 percent, to 16,776.43, the S&P 500 gained 35.69 points, or 1.83 percent, to 1,987.05 and the Nasdaq Composite added 73.49 points, or 1.56 percent, to 4,781.26.