Singapore’s STI inches up 0.1% to 3,454.19, remaining buoyant amid a continuing global rally in stocks. But Kevin Scully, executive chairman at NRA Capital, questions the sustainability of the rally.

He notes most of the recent gains were driven by 10%-15% rises in the banking trio after their 1Q13 earnings came in slightly above expectations and by SingTel’s (Z74.SG) around 10% rise despite only so-so results, while most Singapore companies’ earnings were only in line with expectations.

“It’s very hard for the index to sustain these gains unless we see significant increases in earnings, which I don’t see happening this year,” he says. “Some form of correction is probably overdue,” he says, viewing the market as overbought. Volume is 815.1 million shares valued at $377.8 million; in the broader market, gainers outnumber losers 2.5 to one. In a note, OCBC tips a 3,420-3,460 range.

The banking trio are lower, with UOB (U11.SG) off 0.3%, DBS (D05.SG) down 0.1% and OCBC (O39.SG) shedding 0.8%. SingTel (Z74.SG) tacks on 0.8% to $4.05. Tiger Air (J7X.SG) is down 0.8% at $0.66 after reporting a fiscal-4Q loss after tax of $15 million, narrowing its $16 million year-earlier loss.

{jcomments on}