FTSE STI closed 3,062.61, down 13.02 points or -0.42% with a total volume of 1.40b and a total value of S$1.11b. Total number of advance vs decline was 111 vs 278. Of the 30 component index stocks, 8 closed positive, 1 unchanged and 21 closed negative. The top 5 gainer component stocks were :-
1. SPH +0.050
2. SIA +0.020
3. ST Engg +0.020
4. SembCorp +0.020
5. DBS +0.010
5. F&N +0.010
5. SIA Engg +0.010
The top 5 loser component stocks were :-
1. JSH 500US$ -0.290
2. Jardine C&C -0.250
3. CityDev -0.220
4. JMH 400US$ -0.130
5. KepCorp -0.070
US markets closed at least +0.1% yesterday night after a better than expected housing data. Asian bourses were on a different picture for the day after HSBC flash PMI for China in the month of September came in 47.8, slightly improved from previous month but still in contraction mode. Nikkei closed -1.57%, SSE -2.08% and HSI -1.20%. STI though closed -0.42% but managed to outperform regional bourses. Volume was thin for the day and only 8 of the 30 index stocks managed to register positive closing.
China economy growth is slowing down and it is not something new, thus Chinese Government is also slowly introduce stimulus program at the correct time. Panic selling down due to poor PMI data ? That is not something rationale. Greece and Torika has agreed on most of the austerity targets so that Greece could get the next bailout funds so that is something in which Greece will not bankrupt at the moment. US QE3 probably sentiment over and reality kicks in as to effectiveness of QE3 and what are the risks of QE3 ( in particular to rest of the world in which it would jack up inflation to rest of the world and hindering the growth to rest of the world ). So QE3 is to save US economy or a poison to rest of the world ? Might even be a poison to US economy too. The problem with US is the fiscal cliff in which lawmakers need to act and that is what investors should focus on and not printing money !
The panic selling in STI might not be a bad news after all. Fundamentally sound high-yield stocks have been ramped up for past months and making the dividend yield look very much less attractive. The panic selling or irrational selling should present a good chance to bring down the price, making the dividend yield looks attractive again and that will be another opportunity for investors to buy to hedge against global low interest rate.
Not look at just current situation but rather look beyond that. Ability to think and act two steps ahead of the market is a must now.
