Wednesday, July 3, 2013

Market Summary -- 3rd Jul 13

FTSE STI closed 3,129.49, down 43.83 points or -1.38% with a total volume of 1.88b and a total value of S$1.03b.  Total number of advance vs decline was 92 vs 299.  Of the 30 component index stocks, 2 unchanged and 28 in the red.  The top 5 loser component stocks were :-

1. Jardine C&C  -1.060
2. JMH 400US$  -1.010
3. CityDev  -0.300
4. UOB  -0.210
5. DBS  -0.190

US markets fell last night despite factory output showing sign of US economy improvement.  Asian bourses were mostly lower for the day with Nikkei -0.31%, SSE -0.61% and HSI -2.48%.  STI practically gave back yesterday gain with a -1.38% closing in thin volume and value day.  None of the 30 index stocks managed to register positive closing.

For US it was a pre-holiday, 4th July that led investors to round off short term position and for Asian it was the drag of China in which it released its service PMI this morning dropping below expectation as fear of China growth spread to its service sector.  Investors after past days of gain chose to take profit and remained cautious.

For STI, profit taking, taking cautious and awaiting for earning season to start.  It is an awkward situation now especially for funds ahead of earning season.  Funds were mostly hit with loss in bonds last month which probably in need to lock in profit in stocks to replace the loss in bonds and on the other hand, with stock prices being sold down sharply last month and should the earning remains resilient, they are in a catch-22 situation in which should they re-enter the stocks which they sold or stay sideline and possibility seeing the stock prices continue to rebound.  It is a zero sum game for the funds but no for normal retail investors.  Focus on the company's earning power and its share price, if it is a bargain now then it will be a bargain to grab.

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