Friday, July 5, 2013

Market Summary -- 5th Jul 13

FTSE STI closed 3,169.73, up 22.61 points or +0.72% with a total volume of 1.72b and a total value of S$818M.  Total number of advance vs decline was 259 vs 135.  Of the 30 component index stocks, 24 closed positive, 1 unchanged and 5 in the red.  The top 5 gainer component stocks were :-

1. JSH 500US$  +0.600
2. UOB  +0.260
3. DBS  +0.160
4. SGX  +0.130
5. CityDev  +0.100

The 5 loser component stocks were :-

1. JMH 400US$  -0.310
2. Jardine C&C  -0.100
3. SIA Engg  -0.020
4. HKLand US$  -0.020
5. ST Engg  -0.010

US markets were closed for holiday yesterday while European bourses rallied after BOE and ECB comment.  Asian bourses taking the cue mostly closed positive for the day.  Nikkei +2.08%, SSE +0.05% and HSI +1.89%.  STI rose 0.72% in another thin volume and value day.  24 of the 30 index stocks posted positive closing.

Both BOE and ECB did what US Fed Chief should not do with their stance of extended low interest rate policy and that caused investors to cheer about.  Is it the economic condition in EU and UK that allow the BOE and ECB to maintain extended low interest rate environment or fear of the markets ? Responsible of Central Bank is to ensure enough liquidity and no credit squeeze and should not be push about by markets.  Tonight is the day most investors are looking at, US non-farm payroll.  Something for investors to ponder about.  Should the labor condition in US continues to show improvement meaning US Fed will be on track to halt QE3 mid 2014 whereas a still going nowhere labor condition will allow US Fed to continue its QE3.  Do you want economy continues to survive on life support (QE3) or economy finally manage to recover ? The latter will be more welcome than anything given that the more QE3 it is undergoing, the more risk it will bring in the future.  Should non-farm payroll comes in as a solid set of data and markets sell down for it, no doubt from fundamental point of view it will be a great bargain opportunity.  However, if non-farm payroll comes in below expectation and markets rally due to QE3 will still be there, be prepared for stock prices move above fundamental which is no good.

STI again in thin volume and most of the activities were on penny stocks as investors taking cautious stand ahead of US non-farm payroll.  Investors should look at the bigger picture, the coming corporate earning and next few months economic data and not trying to bet on what the market will behave next week after tonight non-farm payroll.

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