Singapore shares rise on Friday, gain 0.5% on the week

THE US airstrike on Jan 3 that killed prominent Iranian general Qasem Soleimani made the relationship between Tehran and Washington the focal point of market chatter going into the week.

But by Friday, Asian equities were mostly higher after both sides appeared to have settled the score (not before Iran returned the favour by attacking two US bases, of course).

Shortly after the Iranian response on Wednesday, investors ran quickly for safe-haven assets but rotated out just as speedily when Tehran revealed it was not looking for further escalation.

"It was a temporary blip in an otherwise positive environment for equities since the 'Phase One' trade deal was confirmed," one broker told The Business Times.

Chinese officials have confirmed the mini trade deal will be signed on Jan 15 in Washington. As such, Asian markets were in a relatively happy place to close out the first full week of 2020.

CMC Markets market analyst Margaret Yang said: "This helped to clear the last hurdle in the markets following a de-escalation in US-Iran tensions. The question is how much more upside is (left), given the fact that December's rally has more or less priced this in."

In Singapore, the Straits Times Index (STI) made steady gains across the session to finish at 3,255.95, adding 8.47 points or 0.3 per cent. On the week, the blue-chip index gained 17.13 points or 0.5 per cent from Jan 3's close of 3,238.82.

On Friday, trading volume in the city-state clocked in at 1.57 billion securities, 61 per cent over the 2019 daily average. Total turnover came in at S$1.20 billion, 26 per cent more than last year's daily average.

Across the market, advancers outpaced decliners 226 to 193. Seven of the benchmark's 30 counters ended in the red.

Singtel, which closed S$0.04 or 1.2 per cent lower at S$3.32, was the STI's most active counter with 25.5 million shares traded on Friday. Investors continued to pare their positions on the telco after its associate Bharti Airtel revealed plans to raise up to US$3 billion ahead of the due date for fines payable to India's regulators. Citi Research analysts however believe the exercise will not affect Singtel's cash flows.

Shares in Singapore Airlines (SIA) edged up S$0.02 or 0.2 per cent to close at S$8.95. In a report on Thursday, Daiwa Capital wrote that at current levels, the national carrier's low valuations are attractive. The brokerage, which believes SIA's share price will recover later in the year, has a "Buy" call with a price target of S$10.18.

UOB Kay Hian analyst K Ajith expects SIA to report a strong Q3 on good passenger numbers but is cautious about Q4 due to the bushfires in Australia, a market that counts for around 16 per cent of its total passenger capacity. Mr Ajith has an entry price of S$8.60 for SIA.

Among tech plays, AEM Holdings jumped S$0.13 or 6.3 per cent to S$2.18 on Friday. It is the highest-ever closing for the test handler which counts semiconductor giant Intel as one of its main clients.

Elsewhere in the Asia-Pacific, Australia, Hong Kong, Japan, South Korea and Taiwan closed higher. Bucking the trend were China and Malaysia. The former's Shanghai Composite Index posted a slight loss but still managed to notch six straight weeks of gains.