Shares higher at midday but Genting underperforms

Singapore shares rose at midday on Wednesday, helped by news of progress on a U.S. budget-reduction deal and encouraging U.S. corporate earnings, but casino operator Genting Singapore underperformed on expectation of lower quarterly earnings.

By the lunch break, the Straits Times Index (STI) <.FTSTI> was up 0.52%, or 16 points, at 3,112.12. The total value of shares traded in the morning session was around $926 million.

However, local traders said the STI is likely to trade sideways in the afternoon.

 

“The rally (at Wall Street) was probably due to slightly better numbers, less likelihood of a default and some short-covering,” said Kevin Scully, managing director at NRA Capital.

 

With just two weeks left until the U.S. government runs out of money to pay bills, President Barack Obama seized on a plan by a bipartisan group of senators that could revive  stalled U.S. debt talks and the prospect of a long-term deficit reduction deal to avert a default.

 

Shares of casino operator Genting Singapore (GENS.SI) fell as much as 4.1% as traders expected the firm to report lower second-quarter earnings and rival Marina Bay Sands to gain more market share.

 

Deutsche downgraded Genting to hold from buy and lowered its target price to $1.90 from $2.43. At midday, Genting shares were 2.7% lower at $1.78 with 146.3 million shares changing hands, the top volume so far.

 

But Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) rose as much as 3.8%, extending gains from the previous trading session after the firm said it is bullish on its first-half net profit.

 

By the break, Yangzijiang shares were up 2.3% at $1.355 on a volume of 30 million shares.

 

Another gainer was Oversea-Chinese Banking Corp (OCBC.SI), which rose 2.3% at $9.65 with 8.1 million shares traded.

 

“With the focus on differentiating OCBC as a wealth management play, Singapore could still remain the main driver of growth in the medium term,” Credit Suisse said in a report, adding that the bank’s growth in Indonesia is likely to accelerate.

 

Singapore environmental services provider EcoWise Holdings (ECOW.SI) surged as much as 12% to the highest intra-day level since September last year after annnouncing it is in talks related to clean technology.

 

At midday, EcoWise shares were 9.4% higher at $0.151 on a volume of 13 million shares, around eight times the average volume in the last 30 days.