Monday, July 8, 2013

Market Summary -- 8th Jul 13

FTSE STI closed 3,155.47, down 14.26 points or -0.45% with a total volume of 1.93b and a total value of S$897M.  Total number of advance vs decline was 119 vs 259.  Of the 30 component index stocks, 5 closed positive, 5 unchanged and 20 in the red.  The 5 gainer component stocks were :-

1. JSH 500US$  +0.200
2. SGX  +0.110
3. SPH  +0.030
4. Semb Corp  +0.010
5. THBEV  +0.005

The top 5 loser component stocks were :-

1. UOB  -0.280
2. CityDev  -0.160
3. HKLand US$  -0.100
4. DBS  -0.100
5. Jardine C&C  -0.090

US markets closed average +1% last Friday after better than expected US non-farm payroll data with number of jobs created more than expected and jobless rate at 7.6%.  Asian bourses however reacted opposite with Nikkei -1.40%, SSE -2.44% and HSI -1.31%.  STI also fell but managed to crawl back some earlier loss to close -0.45% in another thin volume and value day.  Only 5 of the 30 index stocks managed to register positive closing.

It was the same old story again, a good set of job data pointing to US Fed tapering and fear of tapering sent Asian stock markets lower.  They just played the story over and over again, ain't they bored with this type of event ?  Firstly, US Fed tapering on QE3 to eventually halt and later interest rate hike are steps that should be carry out in order to return to long run equilibrium should the economy is able to self recover.  There is nothing to worry and fear about.  The fear and panic created now is nothing but those who were greedy and went on leveraged of cheap money are facing the consequences.  Another perspective, if you are an investor that invest based on fundamental and valuation, you would "encourage" those who feel fear to sell down more and cheaper so that you are able to buy it cheap based on fundamental, you should be excited and looking forward to the nonsensical action.

STI in line with regional bourses suffered the selling pressure and like last time high-yield stocks were the victim with the same old story (wonder those ain't tired of this same old story ?).  Standing on the fear side of US tapering and panic selling down would have to put it as a loser in the long run.  Everything start and run from fundamental and should there be any mean to move outside of fundamental, they will eventually move back to fundamental.

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