Monday, February 10, 2014

Market Summary -- 10th Feb 14

FTSE STI closed 3,017.20, up 4.06 points or +0.13% with a total volume of 1.53b and a total value of S$885M.  Total number of advance vs decline was 189 vs 244.  Of the 30 component index stocks, 16 closed positive, 3 unchanged and 11 in the red.  The top 5 gainer component stocks were :-

1. Jardine C&C  +0.340
2. OCBC  +0.070
3. SIA Engg  +0.060
4. DBS  +0.030
5. SIA  +0.030

The top 5 loser component stocks were :-

1. JSH 500US$  -0.250
2. JMH 400U$  -0.250
3. SGX  -0.070
4. UOB  -0.050
5. Kep Corp  -0.040

US markets closed at least +1% last Friday after the non-farm payroll data.  Asian bourses opened positive but closed mixed for the day.  Nikkei +1.77%, SSE +2.03% and HSI -0.27%.  STI opened positive, gave up the gain but managed to pop up on close with a +0.13% in thin volume and value day.  16 of the 30 index stocks recorded gain.

It was a mixed bag of result for the non-farm payroll.  Number of jobs created missed expectation but unemployment rate dropped to 6.6%. The fewer than expected jobs created could be signaling the strength of labor market is losing steam and that could prompt the US Fed to temporary halt tapering in the next FOMC meeting but the continue improvement of unemployment rate towards US Fed target of 6.5% can lead to US Fed continue the tapering next if they only solely focus on that figure but ignoring the bigger picture.  The confusing non-farm payroll no doubt caused Asian markets to be divided too as any halt of tapering could lift the negative sentiment while further tapering can lead to further selling off in emerging markets.  Investors will also be looking at this week economic data from China and Asia Central Banks' action.

STI taking the cue from positive closing of US markets started well but soon profit taking kicked up and erased those gain but the last minute popping up the index stocks on close lead to a positive closing (a very misleading view).  The broader market was weak as seller outnumbered buyers.  Short-term traders, punters and short-sellers were taking the opportunity of the up to dump or cut position.  Last Friday after market closed, SGX and MAS announced new measures (consultation paper) to regulate the trading namely, requiring a collateral of minimum 5% to be placed for contra play, setting a minimum price for mainboard listed stocks, requiring individual to disclose short position, cutting down the settlement period from T+3 to T+2 by 2016 and reducing clearing fee from 0.04% to 0.0325% (of contract value) in May.  Despite those measures, still have lot of questions unanswered in particular trying to discourage punting of penny stocks, in short a half-hearted efforts only.

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