Friday, August 16, 2013

Market Summary -- 16th Aug 13

FTSE STI closed 3,197.53x, down 23.39 points or -0.73% with a total volume of 3.30b and a total value of S$1.42b.  Total number of advance vs decline was 188 vs 251.  Of the 30 component index stocks, 3 closed positive, 2 unchanged and 25 in the red.  The 3 gainer component stocks were :-

1. SIA  +0.040
2. SIA Engg  +0.020
3. Genting SP  +0.010

The top 5 loser component stocks were :-

1. Jardine C&C  -0.480
2. JMH 400US$  -0.390
3. UOB  -0.160
4. CityDev  -0.150
5. JSH 500US$  -0.140

US markets fell at least 1.4% yesterday after series of negative events.  Asian bourses taking the cue mostly traded in the negative region.  Nikkei -0.75%, SSE -0.64% and HSI -0.10%.  STI fell more than 1% in the morning session but managed to trim the loss to -0.73% in a slight heavy volume day but daily value still thin.  Only 3 of the 30 index stocks managed to posted gain.

Series of negative news like weak corporate earning and Egypt's riots offset the bright news of weekly jobless claims fell to lowest trigger investors to sell.  In fact the bright news in jobless claims further caused investors to think that US Fed will start tapering next month.  The crisis in Egypt is not something new, remembered in early 2011 ?  It will take time to cool down the crisis and certain impact on global economy will be there in particular crude oil but by far that should not derail the global economy at the moment.  The most interesting thing is the continuation of improvement in US labor market further point to a US Fed tapering as early as next month and stock markets globally probably are reacting to that now.  However do note that, should there is a tapering next month, investors now still unknown of the detail and current selling down could over estimate the tapering and will not be surprised should detail release next month due to tapering, investors will come back in to buy back the beaten down stocks again.  Reaction always overblown.  Another interesting activity today was SSE, it spiked 5% but gave up all those gain to close -0.64%. 

For STI it was short-term punters rushing for exit for the day given the overnight weakness in US markets and weekend is around the corner.  Daily volume was slightly heavier due to the new IPO Soilbuild REIT which commenced trading this afternoon.  Singapore also released July non-oil export data coming in at -0.7% but better than expectation.  Another localized news, CPF ordinary account interest rate remained at 2.5%.  While that might mean nothing much to most but giving a deeper thoughts, CPF interest rate cannot dip below bank interest rate and that figure provides investors especially long-term investors a good reference point to hunt for (high-yield stocks).  Stocks might be easily beaten down due to negative news and events but it is also the best time to monitor for resilient and opportunity for bargain hunting.  Reaction to US Fed tapering in September and if it does happen will always be overblown.

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