Friday, May 4, 2012

Market Summary -- 4th May 12

FTSE STI closed 2,990.59, down 10.35 points or -0.34% with a total volume of 2.47b and a total value of S$866M.  Total number of advance vs decline was 132 vs 238.  Of the 30 component index stocks, 8 closed positive, 4 remained unchanged and 18 closed negative.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.250
2. Jardine C&C  +0.180
3. CityDev  +0.150
4. HKLand US$  +0.040
5. GLP  +0.030

The top 5 loser component stocks were :-

1. JSH 500US$  -0.510
2. UOB  -0.310
3. F&N  -0.070
4. SembMar  -0.060
5. Wilmar  -0.040
5. Capitaland  -0.040

US markets closed in the red yesterday night with mix of economic data.  Weekly jobless claims came in better than expected but non-ISM Service data came in below expectation.  Furthermore the sentiment in Europe also dragged down the markets.  Asian bourses were mixed for the day.  Nikkei still closed for holiday, SSE closed +0.49% and HSI -0.77%.  STI fell 0.34% with moderate volume but total value of the day came in only S$866M indicating most of the trading activities around the penny and micro-penny stocks.  Only 8 of the index stocks managed to register positive closing.

It was about EU yesterday after ECB maintained interest rate at 1% but resist in any stimulus program in the meantime as shifting the role of jump start EU growth to EU leaders instead.  Investors didn't like that whenever coming to no stimulus program but what ECB did was rightfully correct as austerity vs growth issue in EU has to be tackle by policies of the respective leaders.  Investors will also be looking at tonight US unemployment situation given that Wednesday ADP number came in short of expectation and concern of a not so good set of data tonight weighed on Asian bourses.  Do also note that should US unemployment data coming in bad tonight, it will also be US political leaders job to create jobs to save the job markets rather than pining hope on US Fed to launch QE3.

Those worries carried to investors in STI putting them focusing on punting the penny and micro-penny stocks for quick profit while being cautious on the blue chips.  Should US markets reacting badly towards the job data tonight and causes Asian bourses to selling down next week, this will be good opportunity to accumulate the fundamentally strong stocks.

There also have been some news past days regarding ASEAN and Asian nation putting up some firewall around Asian economy namely the ASEAN+3 funds and both Japan and China buying each other bonds.  These measures might not have any impact at the moment but Asian countries are no doubt building firewall among themselves to protect against external shocks ( EU and US ).  This firewall will not totally immune the impact from the external shocks but they can provide cushion to the Asian economies to be a better position to cope with external crisis as compared with 2008.  This in a way making Asian economy robust in particular the domestic growth within the country and hence creating a defensive earning to those companies dealing with domestic consumption.  Investors might want to focus on stocks in which the companies have purely domestic business.  It is always good to save for rainy days.

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