Thursday, August 22, 2013

Market Summary -- 22nd Aug 13

FTSE STI closed 3,089.40, down 19.59 points or -0.63% with a total volume of 4.32b and a total value of S$1.67b.  Total number of advance vs decline was 198 vs 274.  Of the 30 component index stocks, 9 closed positive, 1 unchanged and 20 in the red.  The top 5 gainer component stocks were :-

1. JMH 400US$  +0.800
2. JSH 500US$  +0.600
3. Semb Corp  +0.070
4. SIA Engg  +0.070
5. Wilmar  +0.040

The top 5 loser component stocks were :-

1. DBS  -0.240
2. OCBC  -0.210
3. UOB  -0.150
4. CityDev  -0.120
5. Jardine C&C  -0.090

US markets fell average 0.5% after US Fed minutes for July FOMC meeting.  Asian bourses were mixed for the day with Nikkei -0.44%, SSE -0.28% and HSI +0.36%.  STI continued the drop with more than 1% fall in earlier part but managed to pare loss in the afternoon closing -0.63% in a higher daily volume than past days.  9 of the 30 index stocks posted gain on close.

The Fed minutes indicated that majority of the Fed members wanted to see firmer economic data to decide on the scale back on stimulus.  However, that doesn't impress investors as they were actually looking for cue of when exactly US Fed will start taper.  This again created uncertainties and with most believe a September tapering is possible, the sell off continue.  Frankly speaking, US Fed has been very consistent in determine when to taper just that investors on the other hand have another mind which was not in the same wavelength as the Fed.  China flash PMI for August released this morning coming in at 50.1, recovered from contraction the previous month and that lifted the bearish sentiment a bit as most regional bourses managed to pare loss.

For STI a drop of more than 1% happened in the morning session as funds continued to sell coupling with negative cue from US markets overnight and the issue of India and Indonesia (caused stocks with Indonesia exposure facing dumping regardless of logical or not).  However, positive outing from European markets in the afternoon helped pare loss as short-covering and a pause in funds selling prevented further downside for the day.  Daily volume was higher than past days as apart from funds selling off the big caps stocks, punters focused on punting the pennies for quick profit.  One true fact is should US Fed tapering, it has absolutely no fundamental reason on the negative impact for Asian economies, it is just due to the excessive liquidity that went on the over-leveraged due to cheap money has to withdraw.

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