STI soars to highest level since last Oct

STI soars to highest level since last Oct
The Straits Times
05 May 2009

INVESTORS were rubbing their eyes in disbelief yesterday after shares rallied with the kind of gusto that many thought was a thing of the past.

The benchmark Straits Times Index rocketed 108.43 points - 5 per cent - to 2,028.71, its highest since Oct 15 last year when global markets were in free fall. Volumes were also charged, with 2.8 billion shares worth $2.3 billion changing hands.

One dealer had been expecting the local market to be subdued after the long weekend, with investors waiting for the results of the stress tests for United States banks due on Thursday.

But investors defied the game plan and latched on to signs of improving economic conditions.

Retail investors and fund managers flooded the market to buy stocks, igniting a mini boom in such shares as SembCorp Marine and Keppel Corp.

SembCorp Marine rose 33 cents to $2.44 on a volume of 18.9 million shares. The volume was nearly double the average daily volume seen over the past year.

Lots of 20,000 to 50,000 shares were being done, indicating that fund managers were buying.
'Valuations are still low and Asia seems to be recovering,' said one dealer. Fund managers are also worried about missing out on the market's recovery, which could lead them to underperform based on the index.

Keppel Corp rose 4.7 per cent to $6.26 on a heavy volume of 16 million shares.

Cosco Singapore gained 7.8 per cent to close at $1.10, gaining eight cents on a volume of 53.2 million shares.

Owner and operator of coal mines Straits Asia rose 10 cents to close at $1.16 with 43.8 million shares traded.

The stocks were likely driven by hopes that the economic recovery would spur demand for commodities and shipping.

The buoyant mood left many shares at year highs, if not their highest since October last year. SembCorp Marine's price was the highest since Oct 3 when it hit $2.75, while parent SembCorp Industries closed at $2.87 yesterday, its highest since October.

The local banks also fared well. DBS was $1 higher at $10.50 with 21.6 million shares traded, its best finish since October. United Overseas Bank was $1.30 up at $12.80, its strongest performance since Jan 8, while OCBC surged 10 per cent to $6.47 on a volume of 23.7 million shares. This was its highest price since October.

Property counters also had a bounce, with CapitaLand finishing 21 cents stronger at $2.97 on a volume of 40.7 million shares. City Developments rose 82 cents to $7.30 with 8.1 million shares traded.

Golden Agri-Resources, a palm-oil giant, outshone itself with 233.1 million shares traded. It rose four cents to 41 cents as palm oil prices rose to their highest in almost nine months. Other actives contributing to the high volume included PSC Corp, up 5.5 cents to 21 cents on a volume of 136 million shares.

Overall, the STI is now up 15 per cent this year, a reasonable performance considering it had got off to a bright start in early January before steep falls.

Still, some dealers are wary, considering how the index fell just below 1,500 points in March and has now jumped about 12 per cent since the middle of last week.

Retail investors and fund managers flooded the market to buy stocks, igniting a mini-boom in such shares as SembCorp Marine and Keppel Corp.