FTSE STI closed 2,960.30, up 1.48 points or +0.05% with a total volume of 1.88b and a total value of S$1.12b. Total number of advance vs decline was 173 vs 164. Of the 30 component index stocks, 13 closed positive, 7 unchanged and 10 closed negative. The top 5 gainer component stocks were :-
1. Jardine C&C +0.180
2. JMH 400US$ +0.170
3. KepCorp +0.100
4. Olam +0.085
5. OCBC +0.080
The top 5 loser component stocks were :-
1. JSH 500US$ -0.140
2. UOB -0.120
3. DBS -0.110
4. HKLand US$ -0.080
5. SIA -0.070
US markets closed flat yesterday after a see-saw session. Asian bourses were mostly able to close positive for the day. Nikkei +0.87%, SSE +1.07% and HSI +1.39%. STI swinging between positive and negative closed +0.05% in moderate volume. 13 of the 30 index stocks managed to register positive closing.
Couple of events caused US markets to see-saw yesterday with housing starts data providing the brighter side and earning from HP plus US Fed's comment on US Fed will be unable to resolve the fiscal cliff providing the fear for downside. However, US Fed also further stressed that should the US fiscal cliff be avoided, US economy in 2013 will be better. Another events to put concern on investors today was the EU Finance Ministers talk on releasing Greece next bailout funds failed. All eyes will be on this coming Thursday and Friday the emergency EU Summit to see what will be the final outcome before Greece going bankrupt next week.
For STI apart from the global events, attention was also on Olam in which its share managed to recover 5.28% today after the Muddy Waters report. Advice investors to stay cautious on Olam even though with today rebound as that could be just a dead cat bounce. Technically, Olam is on a downtrend and could potential hit the downside target of $0.90. Fundamentally, how true Muddy Waters claim is yet to be justify despite so many analysts keep popping up report that the claim is unsustainable. Investors should look at the debt ratio of Olam and the way its business is carried out and verify own personal risk on it rather than just keep listen to analysts ( on the good and bad side ). After all it is your money that is invested in it and not those from the analysts. This is the time it is at best to treat the analysts' view as nothing but noise and focus on your own assessment on Olam business.
There was another observation from general market transaction. For past weeks defensive and high-yield stocks have been on selling pressure and after the outcome of US President meeting with congress leaders, those stocks somehow are again attracting buying interest. For last week sold down, the S-Reits price for most of them as predicted have fallen to a level at which the dividend yield has increased by 0.3% to 0.5%. If the buying interest is real and not on distribution mode then another further dip in prices would be buying opportunity. It is now too early to conclude the real reason for the buying these few days.
