Singapore shares eke out 0.1% gain on Thursday

WHILE weak economic indicators in the US strengthened the case for the US Federal Reserve to reduce borrowing costs, sending Wall Street to post a record performance on Wednesday, its effect was limited in the local market.

The Straits Times Index (STI) finished 4.45 points or 0.1 per cent higher at 3,372.25.

Markets were mixed in the Asia-Pacific, with Australia, Japan and South Korea closing higher. Meanwhile, China, Hong Kong and Malaysia ended lower.

Investors will be looking to the upcoming US jobs data on Friday, with another disappointing data release strengthening the case for a Federal Reserve interest rate cut.

In Singapore, trading volume clocked in at 1.29 billion securities, 8 per cent over the daily average in the first five months of 2019. Total turnover came to S$936.17 million, 90 per cent of the January-to-May daily average.

With the US market closed on Thursday for the US Independence Day break, a trader noted: "We should expect lower-than-usual trading volumes and turnover on Friday."

Across the market, advancers outpaced decliners 245 to 152. Seven of the STI's 30 components finished in the red.

The local banks were mixed. DBS Group Holdings fell S$0.09 or 0.3 per cent to S$26.06, United Overseas Bank was S$0.12 or 0.5 per cent down at S$26.47 while OCBC Bank finished at S$11.49, edging up S$0.01 or 0.1 per cent.

Singapore real estate investment trusts (Reits) continued to be in fashion despite "expensive" valuations. Investor interest was still high, thanks to dovish central banks and in the case of the local market, the prospect that Reits could see their current leverage limit of 45 per cent raised in future. The iEdge S-Reit 20 Index added 0.5 per cent.

A raise in the leverage limit might enable Singapore Reits to better compete against private capital and foreign Reits when making real estate acquisitions.

On 30.8 million shares traded, Genting Singapore was the blue-chip index's most traded, closing 0.5 Singapore cent or 0.6 per cent lower at 90.5 cents. The casino operator's shares have fallen 3.2 per cent since a JPMorgan's downgrade on Wednesday to "underweight" with a target price of S$0.83.

Sembcorp Marine (SembMarine) shares added S$0.01 or 0.7 per cent to close at S$1.42 following a more than 8 per cent slide on Wednesday after Brazilian authorities executed a search warrant for its Brazilian subsidiary Brazilon Estaleiro Jurong Aracruz.

A trader told The Business Times that while there is no indication on whether SembMarine's share price has bottomed out, "there are opportunities for investors to buy small amounts of the stock".

Sembcorp Industries, which has a 61 per cent stake in SembMarine, also recovered, adding S$0.01 or 0.4 per cent to S$2.42.