Thursday, January 31, 2013

Market Summary -- 31st Jan 13

FTSE STI closed 3,282.66 down 3.24 points or -0.10% with a total volume of 3.84b and a total value of S$1.96b.  Total number of advance vs decline was 172 vs 280.  Of the 30 component index stocks, 10 closed positive, 3 unchanged and 17 closed negative.  The top 5 gainer component stocks were :-

1. DBS  +0.130
2. JMH 400US$  +0.110
3. Genting SP  +0.085
4. ST Engg  +0.060
5. GLP  +0.050

The top 5 loser component stocks were :-

1. Jardine C&C  -1.160
2. JSH 500US$  -1.090
3. SIA Engg  -0.150
4. KepCorp  -0.140
5. CityDev  -0.110

US markets closed at least -0.30% due to mixture of economic data and Fed comment after the FOMC meeting.  Asian bourses were mixed for the day with Nikkei +0.22%, SSE +0.12% and HSI -0.39%.  STI fell 0.17% with thinner volume but increasing value.  10 of the 30 index stocks registered positive closing.

US ADP figure was better than expected hence anticipating a better than expected non-farm payroll this Friday but 4Q GDP came in -0.1% worse than expected resulting in GDP for FY12 came in at +2.2%.  US Fed maintained monetary policy (spending US$85b in bond purchasing each month) as status quote citing the stall in economy.  Bad news that weighed on investors was the stall in economy growth while the good news for those who are rooting for more money being printed is US Fed will be committing to that based on current economic situation.

For STI decrease in volume due to investors sideline and increase in value was due to selective month end window dressing on the blue chips.  Couple of hot topic issues circling around STI recently apart from the global events and corporate earning.  Since the release of the White Paper on Population, Government slowly announcing plans to expand infrastructure to support that while majority of the public disagrees with the population plan.  The Government will need to justify themselves why such a population of 6.9m is needed by 2030, lot of explanation is needed in particular what economic model the Government will be adopting that requires that size of population.  After the F&N-TCC-OUE bidding war saga finally came to a close after OUE dropped out and TCC managed to get more than 50% thereby triggering an unconditional offer to privatize F&N, a new bidding war saga materializes yesterday when UE came in to out bid STC for WBL Corp by offering $4/share.  Most expected another bidding war saga in which STC might raise its offer and again loyal shareholders of WBL Corp will no doubt be the most beneficial of all.  The 2 privatization events no doubt has caused investors wanting to hunt for the next stock to be so and most likely candidates should be those fundamental strong company whose stock price still trading at discounted NAV.  Even without the privatization theme, these discounted NAV stocks very likely to rise to play catch up.

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