Thursday, May 23, 2013

Market Summary -- 23rd May 13

FTSE STI closed 3,393.17, down 61.20 points or -1.77% with a total volume of 4.54b and a total value of S$2.65b.  Total number of advance vs decline was 60 vs 446.  Of the 30 component index stocks, 1 closed positive, 1 unchanged and 28 in the red.  The only gainer component stocks was :-

1. JMH 400US$  +0.110

The top 5 loser component stocks were :-

1. Jardine C&C  -1.190
2. JSH 500US$  -0.270
3. OCBC  -0.270
4. ComfortDelGro  -0.255
5. KepCorp  -0.220

US markets reversed earlier gain and closed at least -0.5%.  Asian bourses were on a nose dive day with Nikkei crashed 7.32%, SSE -1.13% and HSI -2.54%.  STI in line with regional bourses closed -1.77% in heavy volume and value.  Only 1 of the 30 index stocks managed to register positive closing.

US Fed Chief's testimonial for the Congress yesterday and a contraction in HSBC flash China PMI did the trick for global markets to hit the sell button.  Nikkei rose 2% in the morning and nose dive to -7% on close. Those were the excuse given for the selling but those are actual fact too.  US Fed Chief said of US economy still need stimulus supporting, to take it off will not help economy recover and at the same time the risks along with the stimulus should not be ignored too.  What said of that is nothing but the hard true fact.  China economy has been slowing down recently so a sudden contraction is not at all surprising.  Something for investors to ponder about.  Shouldn't US QE be a flexible scheme such that when economy is showing sign of improvement, it should taper off slowly and if everything wait till last minute then put a abrupt stop to it this will only create bubbles bursting and stock markets will not be able to absorb the sudden shock.  Secondly, as mentioned numerous times before current global economy is each individual nation must do their own part in supporting their own economy and not heavily relying on others.  If so even if China showing sign of slowing, that could be cushioned easily.  The onus for this global selling down day is nothing but due to overly optimistic as the underlying fundamental still weak.  This is nothing but a reality call and this pull back should be happened.

Singapore reported its 1Q GDP this morning, coming in at +0.2% on Year better than expected of -0.6%.  This brought some relief to Singapore economy.  However, that was mostly ignored by the broad base selling down in STI.  High yield and defensive stocks took the biggest hit during this sell down as investors and funds cashing out.  Do not get pessimistic now, the last leg of bull still not in the final stage, any overly reaction will be opportunity to buy for short term.  Just need patience to wait for the correct price to come.

No comments:

Post a Comment