Tuesday, February 21, 2012

Market Summary -- 21st Feb 12

FTSE STI closed 3,025.07, up 3.88 points or +0.13% with a total volume of 2.32b and a total value of S$1.60b.  Total number of advance vs decline was 268 vs 272.  Of the 30 component index stocks, 13 closed positive, 11 closed negative and 6 remained unchanged.  The top 5 gainer component stocks were :-

1. JSH 500US$  +0.350
2. UOB  +0.290
3. Capitaland  +0.070
4. DBS  +0.050
5. OCBC  +0.030
5. SIA  +0.030

The top 5 loser component stocks were :-

1. JMH 400US$  -0.400
2. Jardine C&C  -0.240
3. CityDev  -0.090
4. HKLand US$  -0.070
5. CapMallsAsia  -0.045

US markets were closed yesterday while European markets closed positive ahead of the Greece's bailout decision.  The EU Finance Ministers meeting ended in early Tuesday morning European time and finally agreed to release the 2nd bailout funds to Greece with condition of Greece meeting a target of 121% debt to GDP ratio in 2020.  The relief news however were pretty much muted in Asian markets with Nikkei closed -0.23%, SSE +0.75% and HSI +0.25%.  STI inched up a +0.13% closing with 13 of the 30 index stocks registered positive closing.

The muted reaction by Asian markets were pretty much expected as investors more or less believe the Greece bailout will be done.  The bailout might be a relief news to financial markets but for Greece itself this might not be a good news.  Greece will have to achieve the target of debt to GDP ration of 121% in 2020 with austerity measures that result in jobs cut and not much in economy growth.  It will be a long and hard road for Greek.

Investors should focus on implication of the bailout rather than the outcome of it.  Short-term wise, financial market might take a breadth from the trouble Greece debt but somewhere down the road when Greece need to payout for mature bonds and should it unable to pay up, the same old problem will resurface again.  Investors might want to look at a period from March to June and should market consolidate and pull back, might be a chance to buy and re-enter the market after missing most part of the rally since turn of the year.  Dollar-cost-averaging method might be appropriated.

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