SG Market Analysis -- 4th Aug 08

STI closed 2906.07 on 1st Aug 08, down 16.84 points or 0.58% from previous week. However, it is still able to maintain above the 2900 level. The only day STI closed below 2900 level was on 29th Jul 08 while rest of the days of the week all managed to close above 2900 level. As compared to the violatile US markets, STI showing relatively resilient in its performance. Last week, couple of the blue chips reported their quarterly earnings and a mixed set of result was obtained. Property stocks Kepland and Capitaland both reported a below expectation set of earnings; Kepland 2Q net profit S$52.7M vs S$63M and Capitaland 2Q net profit S$515.2M vs S$912.6M. SIA 1Q net profit S$359M vs S$424M. The more positive result is KepCorp when its record a 2Q net profit of S$299.3M vs S$282M and SingPost 1Q net profit S$39.4M vs S$38.4M. Meanwhile on the economy scene, Singapore unemployment rate raise to 2.3% as compared to 2% in 1Q. On Friday, S-Shares did an intra-day reversal and most of them ended with day high price mainly due to some relaxation of measures from Beijing for the China stock market ahead of the coming Beijing Olympics. The momentum could have carried over to the coming week and potentially we could see more upside for most of the S-Shares.

Technically from the indicators STI is showing a limited downside strength. Its MACD is slowly moving towards the zero line, RSI and Stochastic both lying flat around the 50% level. The immediate support for STI would be the 2900 psychological level and if that failed to hold, the next support level would be at around the 2850 level. Upside for the moment is capped at the 50d EMA level of 2970. If US market is able to rally strongly to the reaction of US Federal Reserve's decision on the interest rate, STI will be potentially testing the 3000 psychological level, which it failed to clear on 24th Jul 08. If the 3000 level is able to break, the 100d EMA level at 3050 would be the next resistance.


For the coming week, the direction of STI would be very much centered around the US Federal Reserve's decision in its interest rate on 5th Aug 08, health of US finance sector, crude oil price and corporate earnings ( especially the 3 local banks). Below is the list of companies that will be reporting their quarterly earnings for the coming week.

1. Cosco 4th Aug 08
2. Celestial 5th Aug 08
3. CAO 5th Aug 08
4. China Hongx 5th Aug 08
5. Li Heng 5th Aug 08
6. SembMar 5th Aug 08
7. UOB 5th Aug 08
8. StarHub 6th Aug 08
9. Synear 6th Aug 08
10. DBS 7th Aug 08
11. OCBC 7th Aug 08
12. SGX 7th Aug 08
13. SembCorp 6th Aug 08
14. F&N 8th Aug 08


Will there be also a Olympics rally and the traditional National Day rally ?