Monday, April 23, 2012

Market Summry -- 23rd Apr 12

FTSE STI closed 2,962.35, down 32.13 points or -1.07% with a total volume of 3.61b and a total value of S$961M.  Total number of advance vs decline was 121 vs 325.  Of the 30 component index stocks, 1 closed positive, 4 remained unchanged and 25 closed negative.  The only gainer component stock was :-

1. JSH 500US$  +0.150

The top 5 loser component stocks were :-

1. JMH 400US$  -0.590
2. Jardine C&C  -0.560
3. UOB  -0.280 
4. CityDev  -0.170
5. ST Engg  -0.150

US markets closed mixed last Friday with Nasdaq in the red while DJ and S&P500 positive.  Over the weekend, IMF has managed to secure a bailout fund of US$430b and together with those from EU bailout funds, a total amount of around US$1.5t is available for the firewall to April came in 49.1.  Nikkei closed -0.20%, SSE -0.76% and HSI -1.84%.  STI fell 1.07% in a heavy volume of over 3 billion but total value of the day came in less than S$1b.  Only 1 of the index stock managed to register positive closing.

The China flash PMI of 49.1 indicates China manufacturing activities continues to contract but taking a deeper look into the figure, that reading was an improvement from the previous month and usually HSBC flash PMI data came in below the official data to be released next week.  On the surface, the data indicates contracting but also indicating improvement from previous month.  Asian bourses reacting to that by looking at the face value and sold down.  Before jumping into the panic sell button, investors should stay calm and analyze the underlying of the data.

Furthermore, European bourses apart from reacting to China flash PMI data, its own Euro-area services and manufacturing activities also contracted more than estimated in April of 47.4 vs expected 49.3 and previous month data of 49.1.  EU nations also unsettled by the political events which caused some nervous sentiment to investors.  Adding all these up coupling with negative US future market, caused selling in the STI.  In additional, most of the activities in STI were on the penny and micro penny stocks and with little interest from the blue chips, the possible over-reaction of selling down can cause over-reaction in dragging down the STI.

Investors should not be over panic is such situation and focus on the fundamental of the blue chips instead.  Singapore also released its March CPI of +5.2% vs +4.7% expected.

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