FTSE STI closed 3,067.98, down 10.74 points or -0.35% with a total volume of 1.74b and a total value of S$1.20b. Total number of advance vs decline was 142 vs 264. Of the 30 component index stocks, 6 closed positive, 4 unchanged and 20 closed negative. The top 5 gainer component stocks were :-
1. JSH 500US$ +0.530
2. JMH 400US$ +0.420
3. SGX +0.070
4. GLP +0.060
5. StarHub +0.050
The top 5 loser component stocks were :-
1. Jardine C&C -0.460
2. UOB -0.170
3. DBS -0.170
4. SIA -0.090
5. SembCorp -0.060
US markets closed negative yesterday as investors taking profit after the run up for QE3. Asian bourses were mostly negative for the day with Nikkei -0.39%, SSE -0.91% and HSI -0.27%. STI fell 0.35% in a volume dropping below the 2 billion level and only 6 of the index stocks managed to post positive closing.
Is it a normal pull back for consolidation or the reality check in that QE3 actually does nothing much to help the economy ? Whichever the case, investors need to bear in mind the higher risk poses by QE3 as compared to previous 2 QEs given that it has no time frame tag to it.
There was also a case in which probably investors and funds switching out of high-yield stocks and rotate to higher beta one. That move does not sound strategically correct and wise. Global interest rate will remain low until at least mid 2015 and investing in fundamentally sound high-yield stocks would at least assure investors of the dividend return during that periods. Current global economic even after QE3 still unclear and earning for those higher beta stock companies still an uncertain to warrant a higher price level. Technically speaking, the price of high-yield stocks have move up to a unattractive price level as yield driven down at average 1% as compared with June 2012 but the selling down to an attractive price level or reasonable dividend yield level, it will be opportunity to buy.
QE3 is never part of the game changer in US, the game changer is for lawmakers to act with fiscal policies. US Presidential election might be a wild card.
