Friday, February 10, 2012

Market Summary -- 10th Feb 12

FTSE STI closed 2,960.00,  down 21.17 points or -0.71% with a total volume of 3.43b and a total value of S$1.82b. Total number of advance vs decline was 225 vs 393.  Of the 30 component index stocks, 6 closed positive, 21 closed negative and 3 remained unchanged.  The top 5 gainer component stocks were :-

1. F&N  +0.090
2. HKLand US$  +0.020
3. SPH  +0.020
4. SingTel  +0.010
5. ComfortDelGro  +0.005
5. NobleGrp  +0.005

The top 5 loser component stocks were :-

1. JMH 400US$  -1.270
2. JSH 500US$  -0.780
3. Jardine C&C  -0.300
4. CityDev  -0.180
5. SIA  -0.140

US markets continued advanced yesterday night as news of Greece agreed to EU/IMF's condition to secure the bailout funds.  However, after market closed, EU announced that EU leaders want to see Greece implements those austerity measures as law then they are willing to give out the bailout funds to Greece.  News of that together with China export and import fell for January weighed on Asian bourses.  Nikkei closed -0.61%, SSE +0.10% and HSI -1.08%.  STI failing to touch 3,000 level again fell 0.71% with only 6 of the 30 index stocks registered positive closing.

For Greece case it is a "it so near and yet so far away" whether they can get bailout funds or default in March.  Either case can happen and either case might not be good for financial sector in the short-term.  Should Greece manages to get the bailout funds, next target could be switch to Portugal and Greece already in deep recession even with the bailout funds it cannot guarantee they will not need the 3rd next year.  Should Greece get default, financial sector will have short-term credit crunch even though central bankers are standing by to help out.  Banks will have to write-off the Greece debt should it default and selling assets to recoup the capital.  The easier way to selling assets is none other than stock markets hence making short-term stock markets on the selling side.  However, should Greece default in the long term, it will be good for both Greece and EU.

Today DBS, the first of the 3 banks to announce full year earning and it managed to beat expectation but investors are at the moment more occupied with the EU debt issue.  European bourses all opened in the negative in reaction to EU's action on Greece.

Stock markets might be pulling back short-term but should not be over pessimistic that a deep correction will be coming the way.  Short-term investors need to be cautious now.

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