Monday, November 25, 2013

Market Summary -- 25th Nov 13

FTSE STI closed 3,180.65, up 7.80 points or +0.25% with a total volume of 1.26b and a total value of S$699M.  Total number of advance vs decline was 173 vs 215.  Of the 30 component index stocks, 18 closed positive, 4 unchanged and 8 in the red.  The top 5 gainer component stocks were :-

1. Jardine C&C  +0.490
2. SIA  +0.300
3. UOB  +0.170
4. SIA Engg  +0.060
5. ST Engg +0.060

The top 5 loser component stocks were :-

1. DBS  -0.040
2. GLP  -0.030
3. SingTel  -0.020
4. THBEV  -0.010
5. HKLand US$  -0.010
5. GoldenAgr  -0.010
5. CapMallsAsia  -0.010
5. Capitaland  -0.010

US markets closed positive last Friday with both DJ and S&P500 hitting new high closing above 16,000 and 1,800 levels respectively.  Asian bourses however were mixed for the day with most of them giving up earlier gain.  Nikkei +1.54%, SSE -0.47% and HSI -0.05%.  STI though was positive but pretty much flat in thin volume and value day.  xx of the 30 index stocks posted gain on closing.

Nothing to really to cheer about with US markets hitting new high, purely speculative without fundamental as fund managers feeling the pressure to beef up their portfolio if not will be under performing the benchmark index.  This result in pushing up the stock prices without sustainable fundamental reason.  Asian bourses were on different story as fund managers could be taking profit and allow their money to flow back to US markets to catch up with the index thereby resulting in very resistive upside for the moment.  However, the action by the fund managers will prove to be wrong in months time.

Singapore released its October inflation figure this morning coming in at +2% in line with expectation and higher than the previous month figure of +1.6%.  This is important as inflation is unlikely to cool to new low and with inflation slowly edging up (even more strong case to move up should global economy getting better and better), how else can one hedge against inflation given than even if bank interest rate hike still unable to do it.  The chance is here with fund managers having very very short-sighted view coupling with analysts being negative on S-Reits given a backdrop of possible interest rate high, the price of S-Reits are falling thereby making the dividend yield becoming more and more attractive.  For long-term investors, take CPF rate as a guide and anything that could offer a yield that is at least 1.5% to 2% higher than CPF yield will be good for hedging against inflation for the long run.  While the short-sighted views from fund managers and analysts are being negative on S-Reits, their incorrect view will be gain for long-term investors.

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