Thursday, May 30, 2013

Market Summary -- 30th May 13

FTSE STI closed 3,336.01, down 31.46 points or -0.93% with a total volume of 4.2b and a total value of S$2.18b.  Total number of advance vs decline was 132 vs 295.  Of the 30 component index stocks, 7 closed positive, 4 unchanged and 19 in the red.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.280
2. CityDev  +0.020
3. Jardine C&C  +0.010
4. SGX  +0.010
5. ST Engg  +0.010

Thee top 5 loser component stocks were :-

1. DBS  -0.150
2. HKLand US$  -0.140
3. OCBC  -0.130
4. GLP  -0.090
5. Capitaland  -0.090

US markets fell at least 0.60% yesterday. Asian bourses were all in the red for the day.  Nikkei plunged 5.15%, SSE -0.27% and HSI -0.31%.  STI again under-performed regional bourses with a -0.93% closing.  Only 7 of the 30 index stocks managed to register positive closing.  Daily volume exceeded the 4 billion level with daily value exceeded the S$2 billion mark.

Investors were feared of US Fed tapering off stimulus and all rushing to the exit door.  The fact remains that should US economy continues to improve, US Fed will have to taper off stimulus and eventually withdraw all.  The selling down in stock markets globally was none other than in the past investors being overly optimistic chasing stock prices to high and unsustainable level (with reference to fundamental) and now reacting to it.  It will come to a point whereby over-reaction will kick in and bargain hunting opportunity will emerge.  US Fed tapering off the stimulus is a not bad sign if stock prices are at cheaper level but will give markets a shock if prices run ahead of fundamental.

STI on the start of the bell was facing with selling pressure across the broad, taking the most hit were those high-yield stocks in which investors or fund managers cashing out ahead of end of the month.  The rationale is should US Fed tapers off it will have a similar effect as interest rate hike thought it is not physically.  Hence, in the pasts those chasing for high-yield were cashing out.  Prices were down but most of the high-yield stocks fundamental still showing sign of resilience and hence if the selling down becomes over react, it will again be opportunity to bargain hunt with a "high-yield".

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