China stocks sizzle again as ST Index crosses 2,500
Published March 6, 2006
BT
Market Close
By R SIVANITHY
A NEW high for the Straits Times Index thanks to DBS, UOB and Singapore Telecom and continued enthusiasm for China stocks led by China Fishery, China Sun and China Life were the main features of an active but mainly mixed day for the local stock market today.
The session actually got off to a slow start with the ST Index hovering uncertainly below the 2,500 level but once Japan finished convincingly higher and Europe opened firmer, the index took off, eventually closing 19.45 points higher at 2,512.88.
UOB's 40-cent rise to $15.40, DBS's 10-cent rise to $16.30 and SingTel's three-cent rise to $2.68 accounted for about 12 out of the 19 points. The broad market, however, was not as firm as the index's movement suggested - excluding warrants, bonds and debentures, the advance-decline score was 173-168.
The China segment was led by China Fishery, which shot up 29 cents to $3.04. Since listing on Jan 26 at $1.25, the counter has now gained 143 per cent in six weeks, making it the market's best performer.
There were no fresh corporate developments to account for China Fishery's latest rise - in response to a Singapore Exchange query last week, the company said it did not know of any reason for the interest in its shares - and neither were there any new announcements to help propel the other China stocks higher.
As a result, some brokers expressed concern at the inflating of a huge speculative bubble in these counters. As one said: 'We have replaced speculative Malaysian stocks on Clob International with speculative China stocks.'
Sources also pointed out that brokers are now making their rounds of China stocks, trying to find value in those that may not have risen yet.
Turnover in many China stocks was heavy - China Sun, for instance, traded 55 million units while China Dairy traded 25 million shares. Excluding foreign currency issues, overall turnover was 1.32 billion units worth $1.2 billion, in line with recent averages.
SingTel's rise was probably in response to news of the government's Next Generation National Infocomm Infrastructure initiatives, which were announced last week and aim to have every household in Singapore broadband-equipped by 2008.
Citigroup said this would require higher capital expenditure but believes commercial considerations will outweigh these costs. 'Consequently, we see any stock price weakness on these misplaced concerns as a great opportunity to be buying StarHub and SingTel,' said Citigroup.
Among the losers was Parkway Holdings, which dropped five cents to $2.33. Citigroup has a target price of $2.82 for the healthcare provider and today pondered in its daily notes Parkway's new growth initiatives in China, Vietnam and India following a meeting with Parkway's management.
'The board is committed to capital management through good dividends and fund raising to expand, including a Reit if necessary,' said Citigroup. 'In the medium term, management conceded it may retain capital to fund future growth.'
BT
Market Close
By R SIVANITHY
A NEW high for the Straits Times Index thanks to DBS, UOB and Singapore Telecom and continued enthusiasm for China stocks led by China Fishery, China Sun and China Life were the main features of an active but mainly mixed day for the local stock market today.
The session actually got off to a slow start with the ST Index hovering uncertainly below the 2,500 level but once Japan finished convincingly higher and Europe opened firmer, the index took off, eventually closing 19.45 points higher at 2,512.88.
UOB's 40-cent rise to $15.40, DBS's 10-cent rise to $16.30 and SingTel's three-cent rise to $2.68 accounted for about 12 out of the 19 points. The broad market, however, was not as firm as the index's movement suggested - excluding warrants, bonds and debentures, the advance-decline score was 173-168.
The China segment was led by China Fishery, which shot up 29 cents to $3.04. Since listing on Jan 26 at $1.25, the counter has now gained 143 per cent in six weeks, making it the market's best performer.
There were no fresh corporate developments to account for China Fishery's latest rise - in response to a Singapore Exchange query last week, the company said it did not know of any reason for the interest in its shares - and neither were there any new announcements to help propel the other China stocks higher.
As a result, some brokers expressed concern at the inflating of a huge speculative bubble in these counters. As one said: 'We have replaced speculative Malaysian stocks on Clob International with speculative China stocks.'
Sources also pointed out that brokers are now making their rounds of China stocks, trying to find value in those that may not have risen yet.
Turnover in many China stocks was heavy - China Sun, for instance, traded 55 million units while China Dairy traded 25 million shares. Excluding foreign currency issues, overall turnover was 1.32 billion units worth $1.2 billion, in line with recent averages.
SingTel's rise was probably in response to news of the government's Next Generation National Infocomm Infrastructure initiatives, which were announced last week and aim to have every household in Singapore broadband-equipped by 2008.
Citigroup said this would require higher capital expenditure but believes commercial considerations will outweigh these costs. 'Consequently, we see any stock price weakness on these misplaced concerns as a great opportunity to be buying StarHub and SingTel,' said Citigroup.
Among the losers was Parkway Holdings, which dropped five cents to $2.33. Citigroup has a target price of $2.82 for the healthcare provider and today pondered in its daily notes Parkway's new growth initiatives in China, Vietnam and India following a meeting with Parkway's management.
'The board is committed to capital management through good dividends and fund raising to expand, including a Reit if necessary,' said Citigroup. 'In the medium term, management conceded it may retain capital to fund future growth.'
posted by SmartYInvestor at 5:30 AM
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