SingTel leads gains by midday as oil prices ease

Singapore shares rose 1.1% by midday on Friday, breaking four straight sessions of losses as oil prices eased and gains in Singapore Telecommunications (STEL.SI) helped to lift the index.

Shares of index heavyweight Singapore Telecommunications (STEL.SI), Southeast Asia’s largest telecom firm, rose as much as 4.2% after Citigroup upgraded its rating to buy from hold, citing falling subscriber acquisition and retention costs for smartphones in Singapore and Australia. 

At the break, SingTel shares were 3.5% higher at $3.50 with over 15.4 million shares changing hands.

 

By the lunch break, the Straits Times Index (STI) <.FTSTI> was up 33.85 points at 3,006.93. The total value of shares traded in the morning session was $762.8 million, up from $731.7 million on Thursday.

 

Traders said the STI is expected to consolidate in 2,990 to 3,010 in the afternoon, taking cues from European markets.

 

“After a few sessions of selling, we see some value emerging and opportunities for bargain hunting. It’s also supported by a slight pullback in energy costs and oil prices,” said Song Seng Wun, an economist at CIMB Research.

 

Oil eased below US$111 ($141.5) on Friday as top world exporter Saudi Arabia assured key importers it would fill any supply shortfall left by beleaguered fellow OPEC member Libya, soothing fears over a disruption in supplies that had carried prices to a 2-1/2-year high a day earlier.

 

“For markets to come up it has to be because oil prices have also pulled back and the risk factor has come off, to encourage people to bargain hunt,” Song said.

 

Container shipping firm Neptune Orient Lines (NOL) (NEPS.SI), rose as much as 2.5% after saying it plans to order more vessels, a local trader said.

 

At the midday, shares of NOL, the world’s seventh largest container shipping firm, were traded at $2.02 with over 4.6 million shares changing hands.  

 

NOL said in an interview to Reuters on Thursday it will order more vessels to address an expected shortage in the global freight market within a few years.

 

Indofood Agri Resources (IFAR.SI) surged 2.7% to $2.32 by the midday after it reported strong quarterly earnings.

 

It said its fourth quarter net profit doubled to 598 billion rupiah ($85.9 million), up from 288 billion rupiah a year earlier.