STI Gains 1.2% as Semiconductor Stocks Lead Singapore's Market

On Wednesday (Jul 22), Singapore's stock market closed positively, buoyed by a resurgence in global semiconductor importance. A bounce in chip stocks played a crucial role in elevating the Straits Times Index (STI), while local banking institutions also showed favorable gains.

A significant highlight was the introduction of the Singapore Exchange's (SGX) inaugural U.S. Singapore Depository Receipts (SDRs), facilitating local investors’ engagement with select international firms.

STI Sees 1.2% Rise with Gainers Outpacing Decliners

The STI registered an increase of 68.70 points, translating to a 1.2% rise, ending the day at 5,595.42.

In the overall market, 290 stocks experienced upward movement, eclipsing the 279 that fell, with 1.2 billion shares valued at S$2.4 billion traded throughout the session.

The uptick can mainly be attributed to a recovery in semiconductor shares, lifting optimism around global chip markets.

Yangzijiang Shipbuilding Tops Blue-Chip Performers

Among the blue-chip stocks, Yangzijiang Shipbuilding outperformed its peers, climbing 5.6% to close at S$3.94, marking it as Wednesday's leading stock.

Singapore Airlines Faces Decline

Conversely, Singapore Airlines emerged as the day’s biggest loser within the STI, experiencing a drop of 1.8%, or S$0.14, ending at S$7.65.

Local Banks Conclude on High Note

Singapore's primary banks also concluded the day with positive results:

• DBS rose by 2.3%, adding S$1.66 for a final price of S$73.66.
• OCBC increased by 1.9%, rising S$0.54 to close at S$29.18.
• UOB gained 0.7%, up S$0.32 to finish at S$43.04.

These enhancements aided in the overall robustness of the Singapore market.

Mixed Performance in the Next 50 Index

Within the iEdge Singapore Next 50 Index, ValueMax stood out as the highest performer with a gain of 4.8%, increasing S$0.045 to S$0.99.

Meanwhile, CSE Global recorded the most significant drop, falling 3.8%, or S$0.05, to close at S$1.25.

Regional Markets Display Varied Results

Markets throughout Asia concluded with mixed results.

While Hong Kong's Hang Seng Index fell by 1%, Japan's Nikkei 225 experienced a slight decrease of 0.2%. In contrast, South Korea's Kospi rose by 0.7%, and Malaysia's FTSE Bursa Malaysia KLCI saw a decline of 0.5%.

TSMC Price Predictions Bolster Chip Sector

Market strategist James Ooi from Tiger Brokers noted that news about TSMC's potential price hikes in chip production were perceived positively by investors, signaling strong demand and industry pricing power.

SGX Launches Groundbreaking US SDRs

The launch of SGX's first U.S. Singapore Depository Receipts (SDRs) was another milestone on Wednesday.

Covering prominent companies like Sea, Grab, and SpaceX, these new SDRs offer retail investors an effective method to invest in these firms using Singapore dollars.

On their inception day, trading remained subdued:

• The SpaceX U.S. SDR (100 to 1) started at S$1.63 but closed at S$1.61.
• The Grab U.S. SDR (2 to 1) opened at S$2.30, closing at S$2.27.
• The Sea U.S. SDR (50 to 1) began at S$2.78, finishing at S$2.74.

Analyst Highlights SDR Launch as a Positive Step

Despite the slower trading activity, Ooi lauded the SDR launch as a notable achievement for Singapore's equity market.

He remarked, "Including high-profile tech stocks could stimulate engagement from younger, growth-oriented investors, diversifying investment themes in Singapore beyond traditional income options."

Ooi further stated that a broader array of SDRs might enhance overall market engagement, positively affecting liquidity across Singapore's equities landscape.