Friday, September 5, 2014

Market Summary -- 5th Sep 14

FTSE STI closed 3,341.73, down 4.61 points or -0.14% with a total volume of 1.25b and a total value of S$947M.  Total number of advance vs decline was 183 vs 227.  Of the 30 component index stocks, 5 closed positive, 4 unchanged and 21 in the red.  The 5 gainer component stocks were :-

1. OCBC  +0.100
2. ThaiBev  +0.030
3. SembCorp  +0.020
4. Genting SP  +0.010
5. Wilmar  +0.010

The top 5 loser component stocks were :-

1. Jardine C&C  -0.520
2. JMH 400USD  -0.390
3. UOB  -0.230
4. JSH 500USD  -0.200
5. CityDev  -0.100

US markets closed in the red yesterday night and Asian bourses were mixed for the day with mostly in the red.  Nikkei -0.05%, SSE +0.85% and HSI -0.23%.  STI fell 0.14% in thin volume and value with only 5 of the 30 index stocks managed to register positive closing.


ECB did a surprise rate cut from 0.15% to 0.05% yesterday and on top of that will be engaged in asset-backed securities buying program to provide the credit liquidity to counter low inflation and boost economic growth.  That measures were however not like the US Fed QE but nevertheless it surprised investors and caused Europe markets to rally.  US markets initially reacted positively to that but faded to close in the red as investors focus on tonight job data.  Most will use the job data to relate to when US Fed will raise interest rate.  There should be no surprised if US Fed ended its QE this October and start to raise interest rate in 1Q next year.  While US is in the process of tightening monetary policy, EU is easing and Japan is maintaining and at the end of the day, everything just equal off with nothing much has changed in term of global monetary policy status.  The other event for the day is whether Ukraine and its Rebel can reach ceasefire agreement today during the NATO Summit.

STI started the day with a slight gain but fell into the red hovering around the 3,340 level as the weak US markets caused most to take profit and close positions for the weekend ahead of tonight market sensitive US job data.  However, in the later part of the day STI managed to pare loss probably due to short-covering and very selective bargain hunting.  Most just follow the lead from US markets but most forgotten that US markets are in over-valuation stage whereas that is not true for Asia markets.  This is where shrewd investors will find bargain opportunity.

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