Saturday, January 1, 2011

Local bourse flat as year nears its close

TRADERS and fund managers kept their hands firmly in their pockets during the penultimate day of 2010.

The session saw very little action and marginal movement in the benchmark Straits Times Index (STI). It inched up and down within a tight band throughout the day before ending at 3,212.46 points, up only 4.55 points or 0.14 per cent.

Those investors who had not closed their books for the year were waiting for fresh leads about the likely direction of the market after three straight days of gains for Singapore shares.

'The STI did very well (on Wednesday) as it (rose) through the psychological resistance level of 3,200 and closed at 3,207,' said a technical note by SIAS Research. 'It seems like position traders are loading up on stocks in anticipation for the New Year.'

Volumes remained muted at 1.12 billion shares worth $934 million, down markedly from Wednesday's 1.37 billion shares worth $1.2 billion.

The most active stock to emerge was that of Ying Li International Real Estate, which saw 57.2 million trades as it rose 4.5 cents to 44 cents. The Singapore Exchange queried Ying Li on its large volumes, but the firm said it had disclosed all material information and was not privy to any reasons that would explain the trading activity.

Rig builders Keppel Corp and Sembcorp Marine enjoyed a good day. Keppel Corp, the world's largest rig builder, increased 20 cents to $11.24 and Sembcorp Marine, the second largest in the world, advanced 16 cents to $5.37.

Keppel Land, the listed property unit of Keppel Corp, was up five cents to $4.85. It announced after markets closed that it was buying a 17.2ha site in the Chinese city of Nantong for 1.04 billion yuan (S$203 million) for the development of lakefront residences.

Wilmar International, which is continuing its foray into property by teaming up with Shangri-La Asia and China's Kerry Properties to bid for six land sites in China, lost six cents to $5.63. Wilmar owns about 35 per cent of the joint venture and could fork out up to US$395.5 million (S$510 million) for the project to develop sites in Yingkou city, Liaoning province.

This is the second time in a fortnight that Wilmar has announced property investments in Yingkou city. Some investors are concerned that the property move could distract Wilmar from its core commodity business; its share price also dropped the day after it announced its first property investment.

United Overseas Bank (UOB) announced during the lunchtime break that subsidiary UOB Asset Management had won approval to set up a joint venture fund management company in China with Ping An Trust and Sanya Yingwan Tourism. UOB will hold 25 per cent of the joint venture, Ping An UOB Fund Management, which will have an initial paid-up capital of 300 million yuan. The news helped UOB gain 18 cents to close at $18.44.

OCBC Bank was up four cents to $10, while DBS Group Holdings remained unchanged at $14.50.

Other regional bourses had a similarly subdued day of trading. Hong Kong's Hang Seng Index edged ahead 0.13 per cent, Shanghai's Composite Index increased 0.29 per cent, Taiwan rose 0.47 per cent, and South Korea's Kospi Index was up 0.37 per cent.

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