Shares slightly down, but Sembcorp supports; 3,180 cap eyed

Singapore shares were slightly lower by the midday on Thursday, dented by losses on other Asian bourses, but the downside was capped by stronger-than-expected economic data.

Singapore’s first quarter GDP rose 8.5% from the year-ago figure, compared with a median of 6% from a Reuters poll.
The city-state’s central bank separately slightly tightened monetary policy, re-centering its exchange rate policy band upwards and warning inflation was likely to be at the high end of its forecast.

 

By the midday break, the Straits Times Index (STI) <.FTSTI> was down 5.77 points at 3,166.31. The total value of shares traded in the morning session was $689.2 million down from $870.2 million on Wednesday.

 

“The STI is taking the lead from other Asian equities. Its strong move yesterday tipped it into overbought territory in the short term so I expect some minor consolidation this afternoon,” said Phua Ming-weii, a technical analyst at Phillip Securities.

 

Phua said he expects the STI could see more upside in the afternoon and test 3,180, with support at 3,155.

 

“Our strong GDP figures are driving sentiment, and with expectations that the Singapore dollar is likely to gain, holders of Singapore equities would also benefit,” said a local institutional trader.

 

Gains in rigbuilding and engineering conglomerate Sembcorp Industries (SCIL.SI) also helped to lift the STI, after it said it was considering building water treatment plants as well as a large commercial, residential and industrial zone in eastern China.

 

By the lunch break, its shares were 1.9% higher at $5.43 with over 4.1 million shares changing hands.

 

Chinese waste water treatment firm Leader Environmental Technology (LETL.SI) surged as much as 5.6% after DMG & Partners raised its target price to $0.56 from $0.53.

 

The brokerage, which has a buy rating on the firm, raised its earnings estimates after it signed its first operations and maintenance contract agreement worth 245 million yuan.