Wednesday, May 2, 2012

Market Summary -- 2nd May 12

FTSE STI closed 3,006.14, up 27.57 points or +0.93% with a total volume of 3.29b and a total value of S$1.29b.  Total number of advance vs decline was 305 vs 127.  Of the 30 component index stocks, 26 closed positive, 3 closed negative and 1 remained unchanged.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.560
2. JSH 500US$  +0.520
3. Jardine C&C  +0.380
4. DBS  +0.190
5. UOB  +0.170

The 3 loser component stocks were :-

1. CapMallsAsia  -0.025
2. ComfortDelGro  -0.015
3. StarHub  -0.010

US markets closed positive last night after a better than expected ISM data following China PMI for April continued to better than March.  Asian bourses with most of them reopened after yesterday holiday were all positive for the day.  Nikkei closed +0.31%, SSE +1.76% and HSI +1.02%.  STI in line with regional bourses closed +0.93% with a total volume of more than 3b and 26 of the 30 index stocks registered positive closing.

It was all about Manufacturing data.  US ISM data then expected but do not be overly optimistic about it as the high unemployment rate issue still far from resolve and with this coming Friday releasing on latest employment situation, investors will be closely monitor for that.  China PMI might have providing some debatable issue for the past months as HSBC flash data which mostly record SME still show figure less than 50 ( contraction but as months progress, contract lesser ) while the official PMI data all indicating expansion ( value above 50 ).  Which set of reading is reliable ? Instead of hunting for which set of data to track, investors should look at both set of data.  Both set of data showing improvement from months to months despite one being in contraction and the other in expansion.  China economy could be entering bottoming phase/stage with those set of data.  In the situation of an economy in the early phase of recovery or bottoming, the SME probably still showing contraction in activities while the bigger companies with the strong financial status are starting to move up.  This could be the scenario both set of PMI data is telling us.  Investors should start to monitoring for the rebound in China economy.

The rebound of China economy might not be a sharp rebound as the EU debt crisis with its export still create barrier to China economy.  The rebound of China economy too many are considered good as it can drag up the global economy.  I would put that as overly optimistic view as the rebound on China economy will only selectively benefit certain sectors of the global economy.  Do not be too carried away when analysts starting to paint beautiful picture of China economy rebounding.

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