Wednesday, May 30, 2012

Market Summary -- 30th May 12

FTSE STI closed 2,783.95, down 17.90 points or -0.64% with a total volume of 1.15b and a total value of S$892M.  Total number of advance vs decline was 104 vs 251.  Of the 30 component index stocks, 7 closed positive, 1 remained unchanged and 22 closed negative.  The top 5 gainer component stocks were :-

1. UOB  +0.060
2. StarHub  +0.030
3. NobleGrp  +0.015
4. KepCorp  +0.010
5. SIA Engg  +0.010

The top 5 loser component stocks were :-

1. JSH 500US$  -0.590
2. Jardine C&C  -0.490
3. JMH 400US$  -0.230
4. CityDev  -0.180
5. F&N  -0.150

US markets closed at least +1.0% yesterday night after the holiday on Monday.  Asian bourses this morning took  bump after news that deny Chinese Government will roll out as big a stimulus as in 2009.  Nikkei closed -0.28%, SSE -0.21% and HSI -1.92%.  STI fell 0.64% in a thin volume day with again total value of the day came in less than S$1b.  Only 7 of the index stocks managed to register positive closing.

Fear on Spanish banks and news of disappointment in Chinese stimulus set the tone for selling today.  Like mentioned yesterday do not be overly optimistic about Chinese stimulus.  After managing to combat high inflation for past 2 years due to the the 2009 big stimulus and (no thanks to US keeps printing money for nothing that done little to help its economy ), Chinese Government will not want to re-enter the high inflation stage.  With Chinese Government shifting the growth model to a more consumer based ( service based ), any stimulus that going to roll out will only be targeted towards selective sectors and nothing more.  Also please ignore all those analysts keep saying China can save the world !!!  At this junction, each individual country including US has to get their own house in order and stop day dreaming about who will save the world !!!.

The over-reaction to the disappointment of the Chinese stimulus no doubt presented bargain opportunity in STI.  Tomorrow is the last day of the month and could be seeing some window dressing due to fund managers doing adjustment to their portfolio before going on the June break.  Short-term investors, do not get caught at the wrong end when window dressing happens.

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