Wednesday, July 31, 2013

Market Summary -- 31st Jul 13

FTSE STI closed 3,221.93, down 23.52 points or -0.72% with a total volume of 2.20b and a total value of S$1.55b.  Total number of advance vs decline was 132 vs 294.  Of the 30 component index stocks, 9 closed positive, 3 unchanged and 18 in the red.  The top 5 gainer component stocks were :-

1. SembMar  +0.050
2. CapitaMall  +0.020
3. HKLand US$  +0.020
4. SGX  +0.020
5. ComfortDelGro  +0.010
5. SIA  +0.010
5. StarHub  +0.010

The top 5 loser component stocks were :-

1. JMH 400US$  -1.420
2. JSH 500US$  -0.690
3. Jardine C&C  -0.470
4. UOB  -0.190
5. CityDev  -0.110

US markets closed flat ahead of FOMC meeting.  Asian bourses ended the month of July mixed with Nikkei -1.45%, SSE +0.19% and HSI -0.32%.  STI started off in the red after past days of gain and closed -0.72% in thin volume and value despite month end window dressing day.  Of the 30 index stocks, only 9 registered positive closing.

It was the "nervous" and "cautious" day again with all eyes on US Fed on whether will they or will they not on tapering during the FOMC meeting.  US GDP will also be released tonight followed by Friday non-farm payroll data.  China will be releasing its official PMI tomorrow, a week of heavy economic data.

STI despite on a month end window dressing day, activities were dominated by probably fund managers adjusting portfolio (with possibility of selling off to book gain in fear of early US Fed tapering).  High-yield stocks like S-Reits were mostly under selling pressure for the day as most of them just went XD and possible fund managers selling off high-yield stocks in again the concern of tapering and interest rate hike.  Well the true fact remains that even if early tapering and interest rate hike (which nobody can tell when ), the lower the price the S-Reits go, the more attractive they will be based on fundamental and economic sense.  Funds most of the time were never right anyway, they could switch out of more fundamental strong stocks to chase for a particular bubble and when bubbles burst, they are back to square one.  Just like last year Apple and Facebook case when majority of the funds were so bullish about them and next bubble bursts.  The rest is history.  This is the most common mistake of using sentimental to judge on fundamental which most of the time the judgement is wrong and this is happening now.

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