Tuesday, April 10, 2012

Market Summary -- 10th Apr 12

FTSE STI closed 2,982.44, up 22.34 points or +0.75% with a total volume of 2.43b and a total value of S$1.00b.  Total number of advance vs decline was 253 vs 135.  Of the 30 component index stocks, 22 closed positive, 4 closed negative and 4 remained the same.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.940
2. UOB  +0.330
3. CityDev  +0.190
4. F&N  +0.110
5. KepCorp  +0.110

The 4 loser component stocks were :-

1. StarHub  -0.040
2. SIA Engg  -0.030
3. SIA  -0.020
4. DBS  -0.010

US markets fell at least 1% yesterday night due to the weaker than expected jobs data last Friday, which is nothing of a surprise.  Asian bourses after yesterday selling down were mixed for the day due to mix economic news.  BOJ maintained interest rate unchanged and China reported an unexpected trade surplus which caused investors to speculate that China Government might not be loosing monetary policy easily.  Nikkei closed -0.09% giving up most of the gain earlier of the day, SSE +0.88% managed to rebound after the trade surplus and HSI -1.15% playing catch up after yesterday closing for holiday.  STI managed to rebound in heavy volume of more than 2 billion to close +0.75% with 22 of the STI index stocks registered positive closing.

Again market is torn between mixture of good and bad news and as such any over reaction in selling or buying will cause market to move between the range.  The rebound of STI today can be contributed to over reaction in selling down yesterday due to the US jobs data in which investors cautiously came in to bargain hunt and at the same time rush of short covering pushing the index up.  Despite the rebound, market in general still lack the catalysts to move either direction.  Earning season will be starting soon with Aloca being the first US company to report after tonight market close followed by series of financial banks near end of the week.  Singapore's SPH will be reporting this Friday.

Investors look to appear cautious towards the earning as fear of weak earning.  Should anyone comparing earning of a company between Jan - Mar 2011 and Jan - Mar 2012, the basis of comparison might not be appropriate as the economic situation in 2011 was very much different from 2012.  Then the EU debt crisis has not blown up while now, companies probably coming out from another dip after the EU crisis in the second half of 2011.  What investors should look at is the company's earning from Oct - Dec 2011 against Jan - Mar 2012.  Should the economic situation is improving, the earning for the 2 quarters should be showing sign of improvement also.

Cautious on analysts' expectation of corporates' earning.  Analysts have the obligation of churn reports to fulfill their quota but do not have the obligation to look after your investment.

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