FTSE STI closed 3,256.47, down 29.58 points or -0.90% with a total volume of 2.75b and a total value of S$1.26b. Total number of advance vs decline was 104 vs 337. Of the 30 component index stocks, 8 closed positive, 2 unchanged and 20 in the red. The top 5 gainer component stocks were :-
1. SIA +0.230
2. CityDev +0.090
3. Olam +0.065
4. Capitaland +0.060
5. JMH 400US$ +0.060
The top 5 loser component stocks were :-
1. JSH 500US$ -1.260
2. DBS -0.320
3. Jardine C&C -0.300
4. OCBC -0.290
5. KepCorp -0.180
US markets closed negative last Friday with DJ ending 10 days in a row record breaking trend. Asian markets were sent tumbling for the day due to Cyprus bailout. Nikkei -2.71%, SSE -1.68% and HSI -2.00%. STI fell 0.90% in very thin volume and value with only 8 of the 30 index stocks managed to register positive closing.
During the EU Summit over the weekend Cyprus's bailout was slapped with condition, resulting in Cyprus Government voting on a bank tax approval in order to get the bailout. Cyprus citizens were seen rushing to withdraw their money from banks with this proposed measures. The fear of that no doubt strike fear in the market. Is Cyprus bailout going to derail EU, answer is NO. Cyprus economy contribution scale in EU is even smaller than Greece and should Cyprus failed to get the bailout, default and kick out of Euro, the impact is controllable as compared to Greece, Italy and Spain. Is the market right fall ? answer is YES. Global markets have risen too fast, running ahead of fundamental and the Cyprus issue is a very good excuse to send market down to correction. As such, investors should not feel fear and panic over Cyprus. The much needed correction is what most looking for in order to accumulate.
Singapore reported its February non-oil export data this morning, coming in a shocker as it shrank 30.6% on year as compared with -17.7% expected. The big drag again was Pharmaceutical which fell 56.5% on year. This data no doubt put a big question mark on Singapore economy going forwards. That piece of news together with the Cyprus sent investors pressing the sell button when market opened. However, do note the sudden thin in volume. One thing to observe will be many expecting US markets to be in the red tonight in reaction to Cyprus and the reaction of STI tomorrow will give a much signal of the market direction. As mentioned, FOMC meeting is this week, market risk is 50-50 going long or short depending on what investors choose to focus on after the outcome of the FOMC meeting. The negative will be concerned of easing of monetary policy this year while the positive will be easing monetary policy will still be here to stay this year.
