Monday, July 6, 2015

Market Summary -- 6th Jul 15

FTSE STI closed 3,332.94, down 9.79 points or -0.29% with a total volume of 1.17b and a total value of S$833M.  Total number of advance vs decline was 114 vs 315.  Of the 30 component index stocks, 10 closed positive, 3 unchanged and 17 in the red.  The top 5 gainer component index stocks were :-

1. JSH USD  +0.110
2. CityDev  +0.080
3. SingTel  +0.020
4. SIA Engg  +0.020
5. Ascendas Reit  +0.010
5. DBS  +0.010
5. HPH Trust USD  +0.010
5. OCBC  +0.010
5. ST Engg  +0.010

The top 5 loser component index stocks were :-

1. Jardine C&C  -1.120
2. HongkongLand USD  -0.240
3. UOB  -0.110
4. JMH USD  -0.110
5. SIA  -0.050

US markets were closed for holiday last Friday and Asian bourses were mostly in red for the day with Nikkei -2.08%, SSE +2.42% and HSI -3.18%.  STI fell more than 1% during the day but closed -0.29% in typical thin volume and value with 10 of the 30 index stocks managed to register gain.

Two events happened over the weekend, Greece's referendum and China announcing new measures to support the crashing stock market.  The outcome of the Greece referendum vote was a NO, surprising most who believing it will be a YES outcome.  The initial panic triggered knee-jerk reaction and Asian markets were the first to react by selling down in the stock markets.  The outcome will raise a lot of questions to the future of Greece.  How is Greece going to renegotiate for a new bailout program and will Greece still in the euro ?  Asian Central Banks were immediate called into action as meeting was held to discuss means to contain the fall out should Greece eventually exit euro.  Greece exit of euro might not be bad after all for euro and Greece itself as a whole.  The euro, removing the weak and bad should be better off as how worse can it be when something that is weak and bad is being removed ?  For Greece, an exit would mean they will have their own currency and the ability to devalue it will have to recover its economy.  China and Russia probably will be the first 2 nations in eyeing opportunity in Greece as both economy recently met with weakness and that could be the mean to boost their own as well as helping Greece to rebuild.  Next few days or rest of the week will be interesting as investors will be watching what other EU leaders and ECB going to do ?  Chinese Government announced several measures over the weekend to try to stop the crashing market.  That temporary work as SSE was the only market ended with a gain in a sea of red.  Those measures might short-term stop the free falling market but definitely not the correct way to stop the highly leveraged and speculated market.

STI in line with regional markets fell for the day but not as bad as the rest.  Given that it managed to rebound from more than 1% down to close -0.xx% partly due to the rebound of US future and a surprisingly not a sharp fall in Europe markets.  While the uncertainty of Greece in the short-term might be causing worries and weighing down the market, the overall fundamental however is a different story.  Singapore economy should not be affected much but the Greece crisis and the coming corporate earning season should not see any surprise downside too.  Grab the bargain hunt opportunity and not following the herd mentality.

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