STI rises 1.1% to new high, as DBS leads gains

The benchmark Straits Times Index (STI) ended 1.1 per cent or 48.89 points higher at a record 4,346.46 on Wednesday (Sep 10), with DBS leading the gains.

South-east Asia’s largest bank rose 3.6 per cent or S$1.85 to S$52.73, with its market capitalisation reaching S$149.6 billion at the close.

At US$116.6 billion, DBS’ market capbeat that of Sea. Just two weeks earlier, the Internet company had overtaken the bank to become the region’s most valuable listed company. At the close on Sep 9, New York-listed Sea’s market cap was US$114 billion.

Singapore Exchange market strategist Geoff Howie said DBS “caught a strong bid tone” after JPMorgan upgraded the stock to “overweight” from “neutral”, and revised its target price to S$56 from S$50.50. UOB Kay Hian also revised its target price for DBS to S$54.40, from $52.80 previously.

This led to the stock rally, with trading turnover surging to S$441.1 million, compared with its average of S$220 million this year, Howie said. “This had a significant impact on the STI, given DBS’ 26 per cent index weight, up from 23 per cent a year ago,” he added.

Meanwhile, OCBC rose 0.5 per cent or S$0.09 to S$16.85, and UOB lost 0.3 per cent or S$0.09 to end at S$35.48.

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The biggest decliner on the STI was UOL, which fell 2 per cent or S$0.15 to S$7.40.

Across the broader market, gainers outnumbered losers 297 to 252, after 1.5 billion securities worth S$1.7 billion changed hands.

Elsewhere in the region, key indices tracked gains on Wall Street to close higher. The Nikkei 225 was up 0.9 per cent, the Hang Seng Index added 1 per cent, the Kospi gained 1.7 per cent, and the FTSE Bursa Malaysia KLCI climbed 0.3 per cent.

US stocks rallied overnight amid expectations for a rate cut and good overall earnings growth, said Neil Wilson, UK investor strategist at Saxo Markets.

He added: “For ages, it’s looked like inflation was the greater worry (for the US Federal Reserve); increasingly, lately, it’s the jobs picture that is the concern. A hot consumer price index print (on Thursday), if it emerges, creates volatility for stocks.”