Wednesday, October 2, 2013

Market Summary -- 2nd Oct 13

FTSE STI closed 3,152.58, down 28.92 points or -0.91% with a total volume of 3.41b and a total value of S$1.44b.  Total number of advance vs decline was 171 vs 260.  Of the 30 component index stocks, 4 closed positive, 5 unchanged and 21 in the red.  The 4 gainer component stocks were :-

1. SembMar  +0.040
2. Wilmar  +0.020
3. NobleGrp  +0.010
4. SIA  +0.010

The top 5 loser component stocks were :-

1. JMH 400US$  -1.880
2. Jardine C&C  -1.010
3. JSH 500US$  -0.500
4. DBS  -0.290
5. UOB  -0.240

US markets closed positive last night despite US Government partial shutdown.  Asian bourses were mostly red for the day with Nikkei -2.17%, SSE closed for holiday and HSI +0.55%.  STI gave back all the gain from yesterday closing -0.91% in really thin volume and value day.  Only 4 of the 30 index stocks posted gain.

The US Government partial shutdown was not the killing event in this month but rather the debt ceiling.  Failure to resolve that will see US Fed default on obligation and that will have a certain impact globally as rest of the world are all holding US Treasury.  This is the event that caused regional markets to drop today.  How the debt ceiling issue going to resolve, nobody knows, one possibility is they going to raise the limit at the very last minute of the deadline again.  That is never a good solution for the long term.  If the debt ceiling can be easily raise meaning US Government is able to borrow more debt in the future, why have a safe guard in the ceiling at the first place.  The option of US lawmakers not doing anything and let it default is there but no political party is stupid enough to allow all the fingers point at them.

STI was overrun by selling pressure today surrendered all of yesterday gain.  Even the punters ditched all the penny punting activity to stay on the cautious.  From now till 17th October, there is every chance for the market to get panic and irrationally sell down due to the debt ceiling and investors at the moment should really focus on fundamental of the stock.  Any irrational sold down that is not due to fundamental issue will present great bargain.  Also keep an eyes on earning season starting soon in the 2nd week of October.

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