Monday, April 16, 2012

Market Summary -- 16th Apr 12

FTSE STI closed 2,992.12, up 4.30 points or +0.14% with a total volume of 2.51b and a total value of S$918M.  Total number of advance vs decline was 134 vs 223.  Of the 30 component index stocks, 13 closed positive, 13 closed negative and 4 remained unchanged.  The top 5 gainer component stocks were :-

1. HKLand US$  +0.160
2. KepCorp  +0.140
3. JSH 500US$  +0.100
4. OCBC  +0.030
5. Jardine C&C  +0.030
5. Wilmar  +0.030

The top 5 loser component stocks were :-

1. JMH 400US$  -0.270
2. UOB  -0.200
3. SIA  -0.080
4. SGX  -0.030
5. SIA Engg  -0.020
5. NOL  -0.020
5. GLP  -0.020
5. CityDev  -0.020

US markets fell at least 1% last Friday despite beating expectation earning from JP Morgan, Googles and Wells Fago as investors chose to focus on a below expectation of China 1Q GDP and Spain's debt issue.  Asian bourses taking the cue from US opened lower but closed mixed for the day.  Nikkei closed -1.74%, SSE -0.09% and HSI -0.44%.  STI on the other hand managed to reverse earlier loss to close +0.14% as bargain hunter came in after European bourses and DJ futures rebounded from last Friday selling down.  Daily volume was over the 2 billion mark but total value came in less than S$1 billion indicating lot of penny stocks activities.

Questions should be asked of regarding China 1Q2012 GDP growth of +8.1% which came in below expectation of +8.4% as to why US and European bourses reacted to it by selling down.  The slowing down in China economy is not something to be surprised of as in February China Premier Wen Jiabao already lowered China GDP forecast for 2012 to +7.5%.  Should US and EU felt that China slowing down can drag them down then they need to take a deeper look into the rationale of that.  Should US and EU able to boost their economy growth on the domestic front, they should not worry about the impact of China slowing down.  The basic of economy is that people have the jobs, with the salary they can spend and consumption helps fueling domestic growth. Both US and EU nations are definitely not doing their part in basic economy ( look at US when the Government fails at any attempt to create jobs for the people and all hoping for US Fed to press the button of printing money to salvage the economy ).  Should they play their part in basic economy, why should they worry about the slowing down of China.  Note, China economy is slowing down as they are shifting their growth model from export to consumption base and should not have expect those double digit growth days anymore.  If investors cannot analyze the logical part and start selling down the markets, that is plain irrational and illogical.  Therefore, the selling down is never justify.

Singapore's SPH reported a with expectation set of earning last Friday and with more blue chips earning coming this week, STI is very cautious at the moment especially the blue chips.  Investors are advised to move out of penny stocks play and refocus back to the blue chips.  Some of the blue chips have been sold down quite a substantial amount past days and is about time to take a look of those.  Cautious on penny stocks play and refocus back to blue chips.

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