Monday, January 20, 2014

Market Summary -- 20th Jan 14

FTSE STI closed 3,128.79, down 18.54 points or -0.59% with a total volume of 3.07b and a total value of S$830M.  Total number of advance vs decline was 146 vs 272.  Of the 30 component index stocks, 4 closed positive, 7 unchanged and 19 in the red.  The 4 gainer component stocks were :-

1. ST Engg  +0.030
2. DBS  +0.010
3. Semb Corp  +0.010
4. StarHub  +0.010

The top 5 loser component stocks were :-

1. JMH 400US$  -1.720
2. JSH 500US$  -0.510
3. Jardine C&C  -0.280
4. UOB  -0.110
5. SIA  -0.090

US markets closed mixed last Friday mainly due to corporate earning.  Asian bourses were all in the sea of red today with Nikkei -0.59%, SSE -0.68% and HSI -0.88%.  STI tracking regional bourses fell 0.59% in another those thin volume and value day.  Only 4 of the 30 index stocks managed to close positive.

The event for the day was China 4Q GDP.  The data came in this morning at +7.7%, slightly above expectation of +7.6% but eased from previous quarter of +7.8%.  It also released Industrial Output and Retail Sales both in line with expectation.  The drop in GDP worried investors in general and caused regional market to fall into red.  However, most have misread the data.  As mentioned China is undergoing reformed in which eventually the GDP will cool to between +2.5% - +4.5% upon successful reformation.  Hence, the GDP will slowly fall year on year.  Most mindset still stick to the old thinking that China should have high GDP.  The slowly falling GDP should be viewed as none other than positive progress in its economy reform.

STI tracking regional bourses fell 0.59%.  Even the micro-penny mostly pull back (as mentioned, last week was the last to get out before music stop, it might still bounce a bit for the next few days but careful not to catch the falling knife).  With little buying interest in the blue chips (from funds and retail), it is not difficult to cause the drop for the day.  Funds by now should be in catch-22 situation.  Pour money into US markets and risked being caught when the bubble bursts or re-invest into the already sold down Asia markets but afraid it might even go down lower.  Unfortunately, most have forgotten the very basic of fundamental and valuation including the funds but then it is this type of situation in which bargain hunting opportunity arises in Asia markets.  To summarize, look at the fundamental of Singapore market and not sentiment.  Have in mind the inflation hedge (sign of rising already appeared last year but most still unaware of), if doesn't hedge now, it will be too late later.

No comments:

Post a Comment