29 September 2012

Shares in Singapore closed little changed on Friday, giving up gains from earlier in the day as investors remained jittery about the sovereign debt crisis in Europe and didn't want to take fresh positions going into the weekend.

The 30-share Straits Times Index closed 0.91 points, or 0.03%, higher at 3,060.34 after touching as high as 3,073.08. The benchmark slipped into the red briefly. The STI finished the week with a 0.6% loss as enthusiasm about central banks injecting life into the world economy waned and concerns about some European nations' ability to push bitter reform measures came back to haunt markets.

Volumes were lower at 1.57 billion compared with 2.07 billion on Thursday and gainers edged out decliners 230 to 209.

"It is still too early to tell if this is but a minor relief rally in a larger down-move, or if the decline is indeed over and markets are reverting back to risk-on again," Maybank analysts said in a note. The benchmark shares likely lack the momentum to push the index out of its recent 3046-3088 band, especially as the weekend kept players from taking firm positions.

Relatively safer stocks, whose businesses are less affected by the global economy, were among the prominent gainers. Investors also like these companies because of their regular dividend payments.

ComfortDelGro was the top performer on the STI and the transport operator closed 2.4% higher at S$1.715. Singapore Technologies Engineering was the second best performing stock, up 2.0% at S$3.54. Mobile operator StarHub rose 1.4% to S$3.72.

Fraser & Neave closed little changed after its shareholders agreed, as expected, to sell their stake in a beer joint venture to Heineken for about $4.6 billion, ending a two-month takeover saga. Shares shed 0.1% to S$8.88.

Cyclical stocks, those most exposed to the global economic environment, had fewer takers. Golden Agri-Resources shed 0.8% to S$0.660 while Noble Group was off 0.4% at S$1.325. Genting Singapore settled 0.4% lower at S$1.37.

22 September 2012

Singapore shares ended firmer Friday as riskier assets like equities were supported by ample liquidity and the prospect of more to come following moves by central banks to ease policy.

The 30-share Straits Times Index closed 0.5%, or 15.62 points, higher at 3078.23. The benchmark index gained 0.3% during the week. Gainers outnumbered decliners 292 to 139 while volumes were nearly unchanged at 1.43 billion shares.

"The euphoria over QE3 is mostly done and attention will shift back to the economic part of the equation," says Lee Kok Joo, head of research at Phillip Securities. "Attention will shift to whether there's any improvement in the macro outlook. This will be the catalyst for any rerating of the market going forward."

OCBC analyst Carey Wong said "the worse the economy does the better rewarded" the market is. "People are expecting money to pour into Asia," Mr. Wong said. "Singapore continues to be a relatively safe haven, so some of the funds are still coming here. Interest rates here are low. Then of course, there's a good chance the Singapore dollar could continue to appreciate."

Near-term resistance remains likely around the year-to-date high of 3088.

Cyclical plays received strong support with shipping company Neptune Orient Lines climbing 1.8% to S$1.145, Golden Agri-Resource up 0.8% at S$0.665 and Olam International 0.5% higher at S$2.05.

Maybank-Kim Eng has upgraded Neptune Orient Lines to Buy from Sell, saying the Federal Reserve's third round of quantitative easing and the European Union's bond-buying program offer a solid floor for the world-wide economy for now. "Take advantage of residual weak sentiment from NOL's exclusion from the STI to own a stock well poised to ride the recovery cycle," the house said.

Property stocks, which benefit from the low-interest rate environment, were also higher with both CapitaLand and City Developments up 1.4% at S$3.17 and S$11.63 respectively.

14th September 2012

Singapore shares surged Friday amid a broad Asian rally after the U.S. Federal Reserve announced an open-ended bond-buying program to boost the American economy.

"The Fed's blank check was enough to send all prices higher. This means 'risk on,' at least for now," UOB Economic-Treasury Research said in a note. But "one cannot help but wonder what would happen when this Dickensian market goes 'please sir, I want some more.'"

The 30-share Straits Times Index rose 1.3%, or 40.28 points, to close at 3070.42--its highest closing level since Aug. 6. For the week, the benchmark index ended 1.9% higher. In the broader market, volume climbed to 2.39 billion shares compared with 1.47 billion shares traded Thursday. Gainers outnumbered decliners 406 to 112.

DBS Vickers expects the benchmark index to gradually work toward 3200 in the fourth quarter, with 3050 and 3075 the two immediate levels to watch. While the STI may underperform the region, DBS Vickers said that "opportunities can be found among the cyclical stocks" such as commodity and offshore and marine names.

Commodity counters led the blue-chip charge, in which all but three STI components ended higher. Wilmar International soared 8% to a one-month high at S$3.24 while Noble Group climbed 5.5% to S$1.35--its highest close since April 4. Olam International, too, hit a one-month high, rising 5.1% to S$2.08. Golden Agri-Resources gained 3% to end at S$0.690.

Property plays also pushed higher, many of them reversing losses suffered Thursday. Hongkong Land led the way with a 2.2% rise to US$6.10 while City Developments added 2% to end at S$11.40. CapitaLand ended up 1% at S$3.18.

Singapore's two main rig builders rose to near-four week highs with Sembcorp Marine advancing 1.8% to S$5.08 and rival Keppel Corp. closing 1.2% higher at S$11.32.

8 September 2012

Singapore shares joined a regional rally to end higher Friday after European Central Bank President Mario Draghi on Thursday presented a plan to tackle Europe's debt crisis.

News that Beijing has approved greater infrastructure spending, including 25 subway and 13 highway projects since April, also boosted sentiment, helping the 30-share Straits Times Index snap a four-day losing run.

"The liquidity fairies delivered on what the markets had been crossing their fingers for over the past six weeks," Andrew Taylor, markets strategist at GFT Markets, said in a note. But "markets sort of know in the back of their mind that these band-aid solutions have only a limited shelf life and each time their effects are reduced," Mr. Taylor said, adding that if European Union leaders don't move forward on integration, "we will see the same strong sell off."

The 30-share Straits Times Index rose 0.8%, or 22.44 points, to end at 3,011.70, but still closed the week 0.5% lower. Volume rose to 1.52 billion shares from 1.08 billion shares Thursday, while gainers outnumbered decliners 324 to 128.

"It will take like one or two months for different market segments to gain confidence. The volume won't change overnight," said Liu Jinshu, deputy lead analyst at SIAS Research. "Weak volume may seem that the market is noncommittal, but given the overnight movement in the (U.S. markets), this rally may have some legs to run."

Cyclical counters, sensitive to shifts in global economic sentiment, led the gains. Commodity trader Noble Group was up 3.4% at S$1.235, while rival Olam International gained 2.7% to S$1.91.

Rigbuilder Keppel Corp. also registered gains, and was up 1.5% at S$11.15, while container shipper Neptune Orient Lines advanced 3.3% to S$1.11.

Property developers also joined the broad-based blue chip rally. CapitaLand rose 1.7% to S$3.08 and City Developments advanced 1.5% to S$11.27.

Golden Agri-Resources performed worst among just six declining STI components, dropping 4.3% to S$0.665, after the palm-oil company announced plans to raises up to US$500 million through a five-year convertible bond issuance. "We are near-term negative on this development as it could dilute our fully-diluted (earnings per share) by 4%," CIMB said in a note. "But if the group can activate earnings-enhancing (mergers and acquisitions), we will turn positive on this exercise."