Market Summary 1st December 2012

Singapore's shares ended higher Friday, turning in gains for nine sessions out of the past ten, as the market shrugged off negative rumblings over negotiations to avert the U.S. fiscal cliff.

Republicans on Thursday rejected President Obama's opening budget-talk bid and House Speaker Boehner said he was "disappointed" with the lack of progress. "The market is prepping for an amicable resolution and attributing the comments from the Republicans as just that. It's not translating into any (market) reaction," said Liu Jinshu, deputy lead analyst at SIAS Research. "The positive is that they've started to talk. It's different from August 2011. This time around, the White House is taking the initiative. If the Republicans reject the package, the blame will be on them," he said. But in a note, Maybank warned "the mood of the crowd can turn on a dime, and we think it best to resort to watching the charts and headlines closer in the short term."

The 30-share Straits Times Index ended up 24.05 points, or 0.8%, at 3069.95, its highest close since Oct. 8. The index tacked on 2.7% for the week. Volume was strong at 2.32 billion shares valued at S$2.36 billion, indicating market players are refocusing on blue-chips after their recent infatuation with penny plays.

But Yeo Kee Yan, market strategist at DBS Vickers, said the gains might not last. "I don't see the index continuing to rise next week. At best sideways, or giving back some of this week's gain," he said. He added that gains will likely be capped until there's a resolution to the fiscal cliff, and said the index's near-term resistance around 3090-3100 was very close. He also expects the traditional year-end lull period to put a damper on gains, with shares picking up again only around the Christmas period.

Olam tacked on 1.0% to S$1.575, extending Thursday's 4.0% rise in strong volume. An analyst said insider buying by the CEO and two directors are "a strong show of support," while there was nothing new in short seller Muddy Waters' latest salvo against the company. Muddy Waters issued an eight-page response to Olam's 45-page rebuttal of the short seller's 133-page report accusing the commodities trader of a litany of failures, ranging from incompetence to malfeasance; Olam called the allegations "false and misleading" and has filed suit in Singapore on allegation of libel and slander.

Among other commodity plays, Golden Agri ended down 0.8% at S$0.66, erasing some of Thursday's 4.7% rise in strong volume accounting for 6.6% of shares changing hands on the SGX.

CapitaLand rose 0.9% to S$3.53. Citigroup said the company's S$505 million bid for a Bishan residential site adjacent to its current Sky Habitat project was a defensive move to prevent competing developers from under-cutting its price.

Genting Singapore advanced 2.4% to S$1.28 in strong volume, with large trade sizes suggesting institutional interest. "Some people believe that we're at the bottom of the earnings cycle for gaming around the region," an analyst said, adding another potential reason for the rise is "you've got pending political change in Japan. So people obviously get hopeful about potential legalization of casinos."

Market Summary at 17th November 2012

Singapore shares ended flat on Friday, surrendering gains in the closing minutes of trading after rising on bargain hunting.

Shares started weaker in early trading, after the government reported Singapore's gross domestic product contracted 5.9% in the July-September period from the previous quarter on seasonally adjusted, annualized terms, sharper than an October estimate of a 1.5% contraction. Although the Straits Times Index rose to an intraday high of 2,954.42 as investors sought bargains, the benchmark index ended 0.01%, or 0.29 point, lower at 2,945.63. Volume fell to 1.48 billion shares from 2.66 billion on Thursday, and gainers outnumbered losers 209 to 183.

The benchmark ended the week 2.1% lower.

However, some analysts said the Singapore stock market has likely bottomed. "Obviously, markets rightfully fear a number of crash-inducing events now, including the U.S. fiscal cliff, a euro-zone breakup, and a China hard-landing," CIMB said in a note. However, "markets have a habit of proving its worst fears, or its worst hopes, unfounded though. The fact that all these are expected means that it is unlikely to happen; if anything were to trigger a major crash, it has to be something not expected now." Several economists say they expect U.S. politicians to reach a deal by the end of the year to avoid sharp tax increases and spending cuts, popularly known as 'fiscal cliff.'

Fraser & Neave was the top performer, gaining 1.6% to close at 9.28 Singapore dollars (US$7.58) as rival Thai and Indonesian tycoons battled for the beer-to-real estate conglomerate. Thai billionaire Charoen Sirivadhanabhakdi's TCC Assets, which has submitted a bid for Fraser & Neave, is considering all options--including raising its offer--after Overseas Union Enterprise, controlled by Indonesia's Riady family, made a counter offer for the company Thursday, according to people with knowledge of the deal.

Stocks of several other companies that had been battered earlier this week clawed back. Wilmar International added 1.3% to close at S$3.16 after losing 1.6% earlier in the week and Noble Group gained 1% to close at S$1.06. However, Golden Agri-Resources closed 2.4% lower at S$0.60, as investors buying the stock now won't be eligible for dividend payment.

Global Logistic Properties was the biggest decliner among benchmark shares, shedding 2.7% to S$2.52 amid signs of economic trouble in Japan and China, which are its main markets.

10th November 2012

Singapore shares were flat Friday as encouraging economic data from China buoyed market sentiment, balancing worries about the looming U.S. deadline for striking a tax deal.

Chinese industrial production rose 9.6% in October from a year earlier, beating market forecasts and picking up pace from the previous month. The improvement in manufacturing "adds more fuel to the bottoming-out argument," said Justin Harper, a market strategist at IG Markets. Meanwhile, inflation in China moderated in October, showing that the government has room to further stimulate the economy if necessary. "This has caused stimulus junkies to start salivating at the prospect of more policy easing from the PBOC," said Mr. Harper.

But worries about the U.S. fiscal cliff weighed on Asian equities markets generally. Still, Singapore's 30-share Straits Times Index shed only 0.1%, less than regional counterparts like Hong Kong's Hang Seng Index, which was down 0.9% Friday, and Korea's Kospi, which lost 0.5%.

The STI ended 2.69 points lower at 3009.56. Psychological support at the 3000 level might have curtailed the STI's losses, as trade was "directionless" for most of the day, said SIAS Research analyst Ng Kian Teck. Volumes were lower with 1.27 billion shares changing hands compared with 1.72 billion Thursday. In the broader market, losers outnumbered gainers 263 to 135.

Noble Group plunged 7.8% to close at S$1.175, making it the biggest decliner among the STI components after its third-quarter earnings disappointed investors. UOB KayHian cut the commodity supply-chain company to a sell rating from buy, citing a weaker-than-expected performance in the agriculture and energy businesses, even though the company posted a net profit of US$75 million overall.

Wilmar climbed 1.6% to end at S$3.17, after reporting a 26% rise in third-quarter income.

OCBC crept 0.2% higher to end at S$9.10 as its third-quarter results, including a nearly fourfold increase in net operating profit, were in line with what the market was expecting.