Monday, August 4, 2014

Market Summary -- 4th Aug 14

FTSE STI closed 3,318.40, down 26.02 points or -0.78% with a total volume of 1.96b and a total value of S$1.06b.  Total number of advance vs decline was 115 vs 388.  Of the 30 component index stocks, 6 closed positive, 6 unchanged and 18 in the red.  The top 5 gainer component stocks were :-

1. JMH 400USD  +0.510
2. JSH 500USD  +0.310
3. Jardine C&C  +0.040
4. ComfortDelGro  +0.020
5. SembMar  +0.010

The top 5 loser component stocks were :-

1. UOB  -0.240
2. DBS  -0.190
3. SingTel  -0.140
4. CityDev  -0.120
5. SIA Engg  -0.060
5. OCBC  -0.060

US markets dropped another at least 0.2% last Friday after the job data.  Asian bourses were mixed for the day with Nikkei -0.31%, SSE +1.74% and HSI +0.28%.  STI continued the slide with a drop of 0.78% in thin volume and value.  Only 6 of the 30 index stocks posted gain.

It was a missed expectation type of job data for US last Friday with number of jobs created came in only at 209k vs expected of 230k while unemployment rate rose up 0.1% to 6.2% as more people returned to job market.  While the job data still remained weak, investors were concerned with US Fed might raise rate sooner than expected after US Fed continued to taper on its stimulus which might end by October.  The concern of rate hike somehow divided global market into two at the moment.  While China is attracting  funds inflow (spreading to Hong Kong), after its recent pick up in economic data (due to the mini stimulus), compared to other markets, China has been largely underperformed in the past resulting in funds rotating out of other markets and flow into China to hunt for value.  That scenario might continue seeing global market less China facing selling pressure while SSE continued the gain.  The correction might not have over but a short-term oversold rebound is on the way.

For STI, the slide continued after hitting 14-month high last week mainly due to funds dressing up the blue chips last week ended being caught and now panic selling away.  However, despite hitting 14-month high last week, broader market was not directly involved in it.  The current selling pressure did spread to the broader market resulting in mid cap and laggard suffered irrational sell down.  These sell down no doubt with present bargain opportunity.  While the blue chips have some more room to drop, the mid and small cap will present opportunity.

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