Source : The Straits Times, Sep 01, 2007
THE local bourse yesterday shrugged off losses on Wall Street to post strong gains amid hopes that United States authorities would soon tackle the sub-prime mortgage crisis.
The Straits Times Index (STI) surged 71.76 points, or 2.1 per cent, to 3,392.91 points, helped in large measure by the three local banks' solid rises.
The surge came despite the Dow Jones Industrial Average's fall of 50.56 points to 13,238.73 points on Thursday.
Investors are hopeful a speech by US Federal Reserve chairman Ben Bernanke, due last night, and moves by US President George W. Bush will ease the crisis that has rocked markets.
President Bush is set to announce plans to help US home owners with sub-prime mortgages pay their loans, The New York Times reported.
Analysts said moves like these helped push up the local market yesterday. Another possible factor for the sharp uptick was month-end 'window-dressing', when fund managers tidy up their portfolios.
The local benchmark index hit an intra-day high of 3,399.35 points in early afternoon trading before declining. Just before the close, however, a sharp spike in the index brought it to within points of its intra-day high.
Despite the strong STI upswing, volume was thin - at only 1.93 billion shares, down from 2.49 billion shares on Thursday.
The value of the shares was higher, though, at $2.39 billion, compared with $1.99 billion the previous day.
Dealers said retail investors stayed on the sidelines. Trading activity was largely confined to traders and investors who were 'bottom-fishing' for bargains.
'With the lack of liquidity, it is easy for the index to move up or down,' said one.
DBS Group Holdings rose 50 cents to $20, likely buoyed by a Standard & Poor's report that its exposure to collateralised debt obligations is unlikely to affect its ratings.
Other banking stocks also enjoyed a reprieve. United Overseas Bank rose 50 cents to $20.80, while OCBC Bank improved 10 cents to $8.55.
SingTel rose 10 cents to $3.64 and contributed 10.3 points to the STI's rise.
On the economic front, there was good news on tourist arrivals, with Singapore receiving 951,000 visitors in July, up 4 percent from a year earlier and a record number for any month.
Labroy Marine continued its slide, after CLSA raised concerns over its head of rig building, Mr K.K.Ng, moving to a business development role. It fell four cents to $1.98.
The usual suspects featured on the top volume list. Centillion was unchanged at 11 cents, with a volume of 128 million shares. Genting International was also unchanged at 63.5 cents with 108.2 million shares.
Construction company Yongnam Holdings rose two cents to 43.5 cents, while Liang Huat Aluminium was two cents weaker at seven cents. Volume was 58.5 million shares.
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