Tuesday, December 10, 2013

Market Summary -- 10th Dec 13

FTSE STI closed 3,081.72, down 31.92 points or -1.03% with a total volume of 1.83b and a total value of S$1.38b.  Total number of advance vs decline was 139 vs 255.  Of the 30 component index stocks, 3 closed positive, 3 unchanged and 24 in the red.  The 3 gainer component stocks were :-

1. JMH 400US$  +0.070
2. ComfortDelGro  +0.005
3. Olam  +0.005

The top 5 loser component stocks were :-

1. UOB  -0.240
2. SIA  -0.150
3. Kep Corp  -0.130
4. HKLand US$  -0.130
5. OCBC  -0.120

US markets closed positive last night but Asian bourses were in a sea of red for the day.  Nikkei -0.25%, SSE -0.03% and HSI -0.28%.  STI continued the sell down with a close of -1.03% with thinner volume than yesterday.  Only 3 of the 30 index stocks posted gain.

As US markets continued to move higher, the bubble is becoming bigger.  Asian bourses were in a sea of red despite upbeat economic data from China in retail sales and industrial output.  Main reason for Asian bourses selling could be another round if funds closing their year end portfolio.  Funds from US, Europe, Asia and Singapore typically closing their account book between November to December.  One round was done last month and this time round is those scheduled to do it this month.

STI continued under selling pressure as funds lighten their portfolio in Singapore market.  The reason is obvious as US Fed tapering will affect South East Asia market leading to under perform (which most forecast to be so in 2014), the growth theme is with North Asia and developed nation (US) and as such funds will have to flow their so that they will not under perform the benchmark.  Their move sound logical but think deeply it is not.  US markets are building bubbles now, downside is a lot whereas SE Asia market including Singapore after rounds of selling down since May, downside is getting limited and downside risk is reducing with each sell down.  US downside risk is increasing with each rally.

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