SGX Market Commentary

Published by BT dated July 30, 2005

Banks, Mapletree light up busy week

OTHER than a continued play on property and banks, the other standout features this week were the Mapletree Logistics listing, the selling of Chartered Semiconductor and Stats ChipPac, and the new all-time highs reached by Biosensors, KS Energy, Labroy Marine, Cosco Corp and the Jardine group, with the latter enabling the Straits Times Index to achieve levels not seen since the start of 2000.

Looked at differently, interest was diffuse, stock-specific and very discriminating. For instance, although property and banks were active, not all rose as they did the week before when the government first announced its relaxed property package.

CapitaLand, Keppel Land and, to a slightly lesser extent, City Developments still enjoyed some post-government package interest, but there seemed to be a cooling off of interest in others like Wing Tai, Allgreen, and Ascott.

The same was evident in banks, where the focus very quickly switched from expectations of more housing loan business to second quarter results. DBS, for example, yesterday added 40 cents to $16.10 after releasing its profit and dividend figures. By itself, DBS contributed 6 points to the Straits Times Index, which finished the day 6.37 points stronger at 2,352.56. Excluding warrants, the broad market's advance-decline score was 163-182, indicating a generally weak day not captured by the bank-driven index.

Thanks to almost 14 million done in DBS and 8.6 million in OCBC, turnover, excluding foreign currency issues, yesterday was 901 million units worth $1.23 billion, the third consecutive day the billion dollar mark was crossed. Non-Sing dollar issues traded 26 million units. For the week, the index gained 33 points or 1.4 per cent, driven mainly by the banks, property and Jardine stocks.

As for other counters that saw meaningful action, much depended on the issuance of broking firm research. Shipping firm Cosco Corp, for example, sailed to fresh highs early in the week, thanks to 'buy' calls from DBS-Vickers and CIMB-GK Goh, while Biosensors has been on the 'buy' lists of a few local and foreign houses - hence the interest which has seen the counter gain more than 50 per cent since listing in May. Cosco, however, dropped five cents yesterday to $2.32 after UBS Investment Research said in a report on the offshore segment that based on its target price of $1.90, Cosco looks expensive.

Negative news or a 'sell' recommendation can have painful consequences, as companies like Huan Hsin, Chartered and Stats ChipPac found out. Huan Hsin caved in after Kim Eng Securities called a 'hold' in anticipation of weak earnings, while Chartered and Stats came under pressure after both reported second quarter losses that brought out a slew of 'sell' calls.

Meanwhile, the market's first logistics and warehouse property trust Mapletree made a solid debut on Thursday, finishing with a 30 per cent premium over its 68-cent offer price and remaining well-supported yesterday.