Shares up on US data, Greece; but Tiger Airways falls

Singapore shares gained 0.7% by the midday on Monday, in line with other Asian bourses as strong U.S. data and an approval for an emergency tranche of funding for Greece over the weekend helped to boost investor confidence.

By the midday break, the Straits Times Index (STI) <.FTSTI> was up 23.19 points at 3,162.20. The total value of shares traded in the morning session was $540.9 million, down slightly from $557.1 million on Friday.

“The market is boosted by a series of good news from better than expected U.S. manufacturing data to relief over Greece’s sovereign debt concern and positive sentiment over Thailand’s election,” said Ng Kian Teck, an analyst at SIAS Research.

 

He expects the STI to trade in the positive region in the afternoon, with gains capped at 3,200.

Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece’s bailout and said details of a second aid package for Athens would be finalised by mid-September.

 

The pace of growth in U.S. manufacturing picked up for the first time in four months, with an index of national factory activity rising to 55.3 in June from 53.5 in May, Institute for Supply Management (ISM) data showed on Friday.

 

"Whilst the STI has been performing positively over the last two weeks, it is too early to say whether it is the start of a bull run or it is just a short term rebound of a bear run,” Ng said.

 

“We need to see more convincing growth data from the US, probably through this week’s unemployment and retail sales figures.”

Shares of Singapore budget carrier Tiger Airways (TAHL.SI) plunged as much as 16% after Australia grounded its operations in the country due to safety concerns and triggered brokerages to cut their ratings for the stock.

 

Tiger Airways shares were 11.3% lower at $1.055 by the lunch break, with over 17.4 million shares changing hands. This was 9.67 times its average daily turnover so far this year.

 

Credit Suisse downgraded Tiger Airways to underperform from neutral and cut its target price toS$0.90 from $1.65, citing risks for the suspension of its Australia operations.

 

Phillip Securities also cut its rating for Tiger Airways to trading sell from hold and lowered its target price to $1.07 from $1.60.

 

Rubber firm GMG Global (GMGG.SI) surged as much 8.3% as its outlook improved after key Tokyo rubber futures rose, traders said.

 

By the midday, its shares were 4.2% higher at $0.25 with over 22.7 million shares changing hands.

 

Aluminium product manufacturer Midas Holdings (MIDA.SI) rose 3.9% to $0.675, buoyed by expectations it could receive more contracts as China expands its railway network, traders said.