Friday, June 29, 2012

Market Summary -- 29th Jun 12

FTSE STI closed 2,878.45, up 31.63 points or +1.11% with a total volume of 1.62b and a total value of S$1.65b.  Total number of advance vs decline was 292 vs 80.  Of the 30 component index stocks, 29 closed positive and 1 closed negative.  The top 5 gainer component stocks were :-

1. CityDev  +0.380
2. UOB  +0.260
3. Jardine C&C  +0.190
4. HKLand US$  +0.150
5. F&N  +0.110

The only loser component stock was :-

1. Olam  -0.005

US markets closed in the red yesterday night but managed to recover from a drop of more than 1% after US 2Q GDP came in at +1.9% in line with expectation, a slightly higher jobless claim data and the court verdict on the healthcare bill.  The trigger of the reverse was anticipation of good news from EU Summit.  Asian bourses started the last trading day for 1H2012 mostly in the red but reversed losses and all closed positive after good news from EU Summit.  Nikkei closed +1.50%, SSE +1.35% and HSI +2.19%.  STI rose 1.11% in thin volume but total value exceeded past days indication of strong window dressing.  Only 1 of the 30 index stock registered negative closing.

EU leaders agreed on 120b Euro growth package ( a 10b lesser than previously stated ) without question and that was the minimum expectation from the EU Summit.  Later of the day, the turning point was news that EU eased Spain debt rules as Germany backed off from resistance.  That was the wish for short-term resolving the debt issue from Spain and Italy.  EU Summit will be entering last day tonight and hope was more good news will emerge.  Investors will also be eying next week ECB's rate decision.

STI finished 1H2012 on a high note with good news from EU Summit and window dressing from fund managers, the next event investors should look forwards to will be corporate earning which will be starting in 2 weeks time.  Those fundamentally good blue chips will be closely monitor with their earning.  S-Reits earning will one again expecting to be resilient.

For those who missed out on the EU Summit ( game changer which I stressed since last month ) and the window dressing, the next event will be the earning season.  As usual only buy on dips and not chasing the price.  As the prices move higher, all the expectation of good earning will be factored in and will provide limited upside after the result was announced.

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