Singapore shares put on 0.2%, continue Monday's gain

SINGAPORE equities continued to sail ahead on Tuesday on investor hopes of accommodative central bank policies, fiscal stimulus by governments and what appears to be an easing of tensions between the US and China. 

The Straits Times Index (STI) built on its positive start to the week, adding 7.50 points or 0.2 per cent to close Tuesday's session at 3,135.95.

Elsewhere in the Asia-Pacific, markets were mixed. Shares in Australia, Japan, Malaysia and South Korea were higher. Meanwhile, shares in China and Hong Kong finished lower, as investors took to booking profits after Monday's strong performance where markets were lifted by China's central bank subscribing to an interest rate reform. The Hang Seng also ended four sessions of gains.

"Positive trade headlines and potential fiscal stimulus provided much-needed relief for investors who have been spooked by recessionary cheerleading and toppling bond yields," VM Markets managing partner Stephen Innes said.

Markets were also buoyed by further delay of the ban on US companies doing business with Huawei.

In Singapore, trading volume clocked in at 1.29 billion securities, 8 per cent more than the daily average in the first seven months of 2019. Total turnover came to S$958.86 million, 91 per cent of the January-to-July daily average.

Across the market, decliners edged out advancers 192 to 183. The blue-chip index had nine of the 30 counters closing in the red.

Yangzijiang Shipbuilding remained the STI's most active counter for a fourth straight session since trading resumed last Thursday, closing four Singapore cents or 4 per cent lower at 97 cents on 48.2 million shares traded. The shipbuilder's share price has been volatile in recent sessions as bulls and bears, and those looking for a quick flip, tussled.

The local banks were modestly lower. DBS Group Holdings closed four Singapore cents or 0.2 per cent lower at S$24.71, OCBC Bank dipped two Singapore cents or 0.2 per cent to S$10.69 and United Overseas Bank ended at S$24.99, easing S$0.16 or 0.6 per cent.

Singapore Exchange market strategist Geoff Howie noted the three banks have "an indicative dividend yield of 4.5 per cent, providing an important cornerstone for Singapore's comparatively high yields". 

"The average indicative dividend yield of the three banks at the end of each month has remained above 4 per cent since the end of October 2018," he added.

Property players fared well on the day, with Hongkong Land adding nine US cents or 1.6 per cent to US$5.85 and CapitaLand advancing seven Singapore cents or 2 per cent to S$3.53.

Among pennies, shares in oil and gas firm Rex International fell 0.2 Singapore cent or 2.6 per cent to 7.6 cents and fellow sector play GSS Energy closed unchanged at 7.4 Singapore cents. 

On Tuesday, RHB Research Institute maintained its neutral recommendation on GSS with a target price of 7.4 cents. "With Q2 margins remaining quite weak, coupled with the tepid macroeconomic outlook, we expect FY2019 to be a tough year for GSS Energy," RHB said.