FTSE STI closed 3,007.57, down 1.99 points or -0.07% with a total volume of 1.98b and a total value of S$899M. Total number of advance vs decline was 179 vs 207. Of the 30 component index stocks, 12 closed positive, 5 unchanged and 13 closed negative. The top 5 gainer component stocks were :-
1. SembCorp +0.070
2. SPH +0.060
3. DBS +0.050
4. GLP +0.050
5. KepCorp +0.050
The top 5 loser component stocks were :-
1. JSH 500US$ -1.040
2. JMH 400US$ -0.650
3. CityDev -0.070
4. SIA -0.050
5. Olam -0.035
US markets managed to close positive last Friday due to better than expected economic data but the fiscal cliff still weigh on investors. Asian bourses were mixed for the day with Nikkei -0.93% after reported a weaker than expected 3Q GDP. SSE +0.49% and HSI +0.21% after China reported better than expected exported data for October over the weekend. STI practically was flat closing -0.07% in heavy volume but total value for the day came in less than S$1b. 12 of the 30 index stocks managed to register positive closing.
US President Obama will be inviting congress leaders this Friday to White House to discuss on deal for the fiscal cliff and this should be pretty much in focus. Though it is now too early too conclude when and what deal could be strucked but nevertheless investors should not be overly pessimistic about the fiscal cliff. Political gridlock might occur again and may drag until December before finally some compromise been made, at the end of the day, the fiscal cliff should be able to resolve before the deadline. In Europe, talks among EU Finance Ministers are in progress on when to release the next bailout funds for Greece after Greek Parliament passed the latest budget bill this morning. EU will also be reporting its 3Q GDP this Thursday and that should some worth watching.
STI will be closed for public holiday tomorrow and as such investors were relatively sideline. The heavy volume was generated by traders punting on the micro-penny stocks. While there are some bargain hunting on the fundamental strong stocks, there are also funds trying to sell. Investors just have to focus on the individual stocks and watch out for bargain price. Typically, should the fiscal cliff issue being dragged into December and market is reacting negatively to it, a typical drop of price for S-Reit could in the range that bring back their dividend yield up to a range of 0.3% to 0.5%. This is roughly a reference of how much "correction" is expected to be. At those level, it is pretty much the threshold for which the dividend yield is relatively attractive to buy some ( probably maximum 50% of investing capital ) for long term investment to hedge against inflation.
