Wednesday, October 16, 2013

Market Summary -- 16th Oct 13

FTSE STI closed 3,174.03, up 8.78 points or +0.28% with a total volume of 2.52b and a total value of S$1.11b.  Total number of advance vs decline was 203 vs 253.  Of the 30 component index stocks, 17 closed positive, 2 unchanged and 11 in the red.  The top 5 gainer component stocks were :-

1. UOB  +0.150
2. JSH 500US$  +0.130
3. StarHub  +0.120
4. CityDev  +0.110
5. DBS  +0.110
5. OCBC  +0.110

The top 5 loser component stocks were :-

1. Jardine C&C  -0.240
2. JMH 400US$  -0.120
3. SingTel  -0.040
4. Kep Corp  -0.040
5. HKLand US$  -0.030

US markets fell yesterday with at least 0.5% drop as US lawmakers still no deal for the debt ceiling issue.  Asian bourses were mixed for the day with most of them in the red.  Nikkei +0.18%, SSE -1.81% and HSI -0.46%.  STI reopened after yesterday holiday posted a 0.28% gain probably playing catch up as regional bourses were positive yesterday.  17 of the 30 index stocks registered gain.

Still no deal, US Government partially shutdown for 2 weeks already and just 1 day away from default.  US House also cancelled vote as the Republican could not gather enough vote to pass it short-term bill.  US Senate also working to try to strike a short-term deal before the deadline 17th Oct.  While the fear of default is there as the clock ticks but this scenario is not something new, 2 years ago the political party also could not agree on a deal until the last minute over the debt ceiling resulting in US rating being downgraded for the 1st time. 

STI though managed to stay positive but trading was pretty much muted as investors staying sideline to see how the debt ceiling saga unfold.  Earning season has started and the US issue has more or less overshadowed that.  A default is possible but that is not end of the world, Singapore will be affected if US default.  However, unlike 10 years ago, couple of the countries in this world at the moment have the ability to cushion the negative impact and recover in the shortest time.  Singapore is one of them.  As such, investors should focus on the fundamental of Singapore.

Some (Asia) learned their lesson from the 1997 crisis but some (US) just refused to learn their lesson from 2 years ago.

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