DBS boosts S’pore stocks

Multiyear highs and big one-day gains for Singapore’s banking stocks have set the city-state’s equities benchmark up today (Tuesday) for its highest level since mid-2015.

The sector has been buoyed by DBS Group, which reported a good start to the year with its first quarter results. Net profit, up by 1 per cent from a year earlier to S$1.21 billion (US$866.6 million), was approximately in line with estimates.

“We expect Venture to still grow positively despite the tough macro environment as it has illustrated over the past few years,” RHB Investment Bank told investors that it was raising the target price to S$14.10 from S$11.20.

Growth in fees from its wealth management business offset provisions for loans to firms in the offshore oil and gas sector, which have been struggling during the global downturn.

DBS was up 2.2 per cent to the share’s highest level since July 2015.

They were on track for their biggest one-day advance since mid-November.

CapitaLand Commercial Trust gained 0.3 per cent. It sold a 50-per-cent stake in a prime office building to a special purpose vehicle owned by insurer FWD Group, in a transaction that will see the Lion City’s largest office provider produce a one-time gain of S$84.6 million.

United Overseas Bank’s (UOB) 3.3-per-cent gain lifted its shares to a two-year high and placed it as the best performer in the Straits Times’ index. It was biggest one-day gain since October 2015. The newspaper’s index was up 0.8 per cent: its highest level since late July 2015.

“DBS Group, trending in line with UOB and with a surprise on the upside for earnings, bode well for the local index,” said Jingyi Pan, an IG strategist. “Non-performing loans have held steady at 1.4 per cent [for DBS], likely to ease some of the concern for investors.”

Jardine Cycle & Carriage increased 1.7 per cent after announcing an almost 50-per-cent increase in net profit attributable to shareholders.

Venture Corp rose 5.8 per cent, surging to a nine-year high, on unexpected first-quarter earnings.

The FTSE Bursa Malaysia KLCI rose 0.6 per cent. Despite only four days of trading, foreign purchase of Malaysian stocks increased to 1.45 billion ringgit (US$332 million) in the previous week, the second highest in a week this year and five times more than that the week before, MIDF Research announced.

The Nikkei Malaysia Manufacturing Purchasing Managers’ Index increased to 50.7 last month from 49.5 in March.

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