Singapore shares end flat after Thursday's volatile session

PERHAPS unsurprisingly, it was the mixed news flow ahead of the US-China talks that were grabbing the most attention (and not US President Donald Trump) that made for a topsy turvy session in Asia.

In the local market, traders appeared to be more bearish in the morning on the outcome of the talks, with the Straits Times Index (STI) opening the day 0.4 per cent lower before clawing back to finish at 3,089.48, down just 0.42 point.

In the Asia-Pacific, South Korea ended lower. Those in China, Hong Kong and Japan posted gains while Australia and Malaysia were little moved.

During Wednesday's US session, reports suggested that China offered to buy another 10 million tonnes of soya beans from the US, a boon for those bullish on successful talks. The sentiment reversed late in that session after deputy-level talks between the two sides were said to have yielded little progress.

But it was word that the US was considering a currency pact as part of a means of reaching a partial trade deal and Mr Trump's possible provision for some US firms to supply Huawei that steadied the ship.

In Singapore, trading volume stood at 975.42 million securities, 81 per cent of the daily average in the first eight months of 2019. Meanwhile, total turnover clocked in at S$802.55 million, three-quarters of the January-to-August daily average.

Across the market, decliners edged out advancers 177 to 174. Thirteen of the blue-chip index's 30 counters ended in the red.

Singtel's shares closed one Singapore cent or 0.3 per cent higher at S$3.15. On Thursday, DBS Equity Research said the telco could cut its dividend rate from 15 to 13 Singapore cents per share for FY2021 in order to maintain its credit rating. DBS analyst Sachin Mittal noted that Singtel's outlook remains challenging, with its regional associates' profit contribution being "a critical factor driving Singtel's share price".

But IHS Markit senior research analyst Wong Chong Jun feels Singtel is unlikely to cut its payout to investors and has shown its ability to generate strong free cash flow to support its dividend policy.

Among tech plays, Hi-P International edged up one Singapore cent or 0.8 per cent at S$1.20. The electronics manufacturing services player is buying Singapore-based high precision plastics manufacturer SEAMCO for US$31 million. Following the deal, Maybank Kim Eng upgraded its call to "hold" and increased its target price on Hi-P to S$1.21. Maybank analyst Lai Gene Lih raised forecasted earnings per share for FY2020-2021 by 8 per cent to factor in the acquisition.

The local banks all ended higher. DBS Group Holdings closed up S$0.11 or 0.5 per cent at S$24.71, OCBC Bank finished S$0.04 or 0.4 per cent higher at S$10.65 while United Overseas Bank ended the day at S$25.49, up S$0.13 or 0.5 per cent.