Thursday, March 1, 2012

Market Summary -- 1st Mar 12

FTSE STI closed 2,978.84, down 15.22 points or -0.51% with a total volume of 1.64b and a total value of S$1.33b.  Total number of advance vs decline was 119 vs 318.  Of the 30 component index stocks, 7 closed positive and 23 closed negative.  The top 5 gainer component stocks were :-

1. SembCorp  +0.060
2. NOL  +0.055
3. CapitaMall  +0.025
4. GLP  +0.020
5. SIA Engg  +0.020

The top 5 loser component stocks were :-

1. JMH 400US$  -0.940
2. Jardine C&C  -0.340
3. JSH 500US$  -0.280
4. CityDev  -0.130
5. F&N  -0.090

US markets closed at least -0.40% yesterday night after US Fed Chief didn't signal any possible QE3 offsetting a better than expected 4Q GDP data.  Asian bourses also mostly negative for the day even after China reported a better than expected PMI as investors worried China will not ease monetary policy soon.  Nikkei closed -0.16%, SSE -0.10% and HSI -1.35%.  STI fell 0.51% in another thin volume day of less than 2 billion with only 7 of the 30 index stocks closed positive.

Investors are pampered that sum up for the drop in markets.  Investors wanted stimulus ( cheap money ) despite the fact that if the economy is able to self sustain and do a self recovery ( which is a good sign ).  EU will enter 2 days of Summit from today and tomorrow.  What is on focus will be the possibility of increasing the EFSF so as to attract more investment from G20 nations to IMF to build up a better and bigger firewall for global economy.

While markets might be pulling back as investors disappointed with lack of signal for more stimulus that doesn't mean bad news.  Should economy is able to self recover without the life saving aids of stimulus, that should be a good news and stock markets are adjusting their valuation to the slow self recovery.  Investors should not focus on whether there will be stimulus or not but rather focus on valuation and fundamental when markets pull back and look for the opportunity to enter the market.  Think big and think far.

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