Wednesday, May 22, 2013

Market Summary -- 22nd May 13

FTSE STI closed 3,454.37, up 10.47 points or +0.30% with a total volume of 3.74b and a total value of S$1.60b.  Total number of advance vs decline was 306 vs 146.  Of the 30 component index stocks, 14 closed positive, 5 unchanged and 11 in the red.  The top 5 gainer component stocks were :-

1. Jardine C&C  +2.000
2. KepCorp  +0.110
3. SGX  +0.110
4. Olam  +0.090
5. StarHub  +0.090

The top 5 loser component stocks were :-

1. JMH 400US$  -1.150
2. UOB  -0.180
3. CityDev  -0.100
4. DBS  -0.070
5. CapitaMall  -0.040

US markets closed positive with at least +0.15% gain helping DJ and S&P500 hitting fresh 5-years high once more.  Asian bourses were however mixed for the day.  Nikkei +1.60%, SSE -0.11% and HSI -0.45%.  STI rebounded from yesterday profit taking with a +0.30% closing taking cue from US markets.  Daily volume was higher than past days while daily value remained more or less the same.  Of the 30 index stocks, 14 registered positive closing.

The cue for the rise of US markets was comment from one of US Fed President citing the continuation of QE3, sort of brushing aside the possible of stepping on the brake soon.  Do not get over optimistic about this, it is a true fact that US need the stimulus for rebound and it is also a true fact that one day it will come to a stop.  Should stock markets reacting very sensitively to the issue of whether stimulus is there or not then it can conclude that the underlying fundamental of the economy is not solid at all.  Hence, even if many cited stock valuation as cheap, it is never never a wise choice to go in for long term investment.  Tonight will be what most investors looking for, US Fed Chairman testimonial in front of the Government, an event in which investors will be looking for cue as to when the stimulus will end.  As a fact, among the US Fed voting members there is already dividing among cooling down of the stimulus.

Japan today reported a weak set of export data for the month of April despite the recent stimulus while BOJ continued a 2-day meeting with its stand on the current monetary policy as status quo.

STI higher daily volume suggested investors turning attention to penny stocks while blue chips might have rebound from yesterday selling, there isn't catalysts to move higher.  Dividend and high yield stocks also rebounded from yesterday selling obviously to the note of US QE still intact at the moment and nothing else.  Upside is limited due to lacking of further positive catalysts.

Market might have rebounded today but lacking of positive catalysts to drive it up further and for the short-term it is biased towards the downside, a needed pull back to digest and consolidate for the last few weeks rally.

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