Market Summary 29 December 2012

Wish Everyone A Happy New Year!

Singapore's shares ended 2012's penultimate session in the green, but while hopes the U.S. would avoid dropping off the fiscal cliff as negotiations are set to resume bolstered the market, caution persisted.

"The markets are hopeful," said Alvin Liew, senior economist at UOB. But he added, "Let's not hold our breath." He expects lawmakers may patch up a temporary deal, perhaps a three-month extension. "Judging by the last two years of American politics we've seen so far, you wouldn't be too hopeful of a grand bargain coming out in the next few days. If so, it would be the biggest surprise of 2012."

The 30-share Straits Times Index ended up 7.87 points, or 0.2%, at 3191.80, totting up a total 0.9% gain for the holiday-shortened week. The index has risen 23 of the past 29 sessions, for a total 8.4% gain over the period.

"Should a fiscal deal--even a more modest one--be hammered by next Monday (Dec. 31), we could still see a strong impulse move up," said Ng Weiwen, macro analyst at Phillip Securities, in a note. "Bulls want to charge higher but lack the conviction to do so amid uncertainties over the looming U.S. fiscal cliff."

But Jason Hughes, head of premium client management at IG Markets Singapore, noted "volumes remain quite subdued and you potentially see people realigning their portfolios before the end of the year before taking Monday and Tuesday off and starting afresh in 2013." Volume was scant at 2.19 billion shares valued at only 946.6 million Singapore dollars ($774.1 million). In the broader market, gainers topped losers more than two to one.

Olam climbed 2.3% to S$1.56, coming off an early drop to S$1.485 despite going ex-rights as Singapore state investment company Temasek Holdings continued to increase its holding in the supply-chain manager, with its stake rising to 19% from 18%. Temasek raised its stake to 18% from 16.3% last week. "In our judgment, the company represents a reasonable attractive investment over the long term," Temasek spokesman Stephen Forshaw said by telephone Friday.

Keppel rose 0.4% to S$11.00 after announcing it landed three new contracts valued at a combined S$420 million, bringing year-to-date order wins to S$9.9 billion.

STX Pan Ocean rose 11.4% to S$4.70, despite trading ex-dividend, after Morgan Stanley and Standard Chartered were appointed lead managers for STX group's planned sale of its stake in the bulk shipper. STX Pan Ocean's Korean shares ended up by the 15% daily limit at 4,715 won ($4.40).

UOB ended down 0.3% at S$19.82, well off its early 3.5% drop to S$19.18, the likely driver for the STI's intraday slip into negative territory. Amid low volume, UOB's traded price suddenly made a large drop from one trade to the next at 0356 GMT, with the price moving to S$19.20 from S$19.52, which could suggest a fat-finger error. "We're definitely seeing some strange moves" in the market, IG Markets' Hughes said, citing low volume and end-of-year portfolio moves.

Market Summary 15th December 2012

Singapore's shares powered ahead to set yet another 16-month high Friday, bolstered by positive economic data from China spurring a strong rally on the mainland.

The preliminary HSBC China Manufacturing PMI for December climbed to a 14-month high of 50.9, up from November's 50.5 final reading. The data was slightly above the market's expectation for 50.8, said Suan Teck Kin, treasury economist at UOB. "The data suggest the bottoming out process has already taken place," he said, adding "if it's positive for China, it should be positive for the rest of the world as well, especially for Asia."

The 30-share Straits Times Index ended up 11.88 points, or 0.4%, at 3168.43, tacking on 2.0% for the week. The index has now risen 17 of the past 20 sessions, rallying 7.6% from its Nov. 16 trough. Volume was 2.13 billion shares valued at S$1.20 billion, in line with Thursday's level.

Among stocks with exposure to China's recovery, CapitaLand ended up 1.1% at S$3.76, Global Logistic Properties tacked on 3.0% to S$2.79 and Yanlord rose 4.8% to S$1.54.

Several STI components jumped despite a dearth of news, with Noble rising 1.8% to S$1.15, City Developments climbing 3.5% to S$12.92 and Genting Singapore gaining 1.9% to S$1.37.

"If fund managers do have a need to put in a bit of window dressing, they'll probably focus on all the underperfoming high-beta stocks," said Carey Wong, an analyst at OCBC. "In the fourth quarter, all the high beta underperformers put in a good show," he said. "It's nothing to do with fundamentals."

Gallant Venture ended flat at S$0.28 after it said it would acquire 52.4% of auto-parts company Indomobil Sukses Internasional for US$809.3 million. "It's left pocket to right-hand pocket," said Ferry Wong, an analyst at Citigroup; he said both companies are essentially owned by the Salim Group. "I don't expect Gallant Venture to add expertise on the operation side," said Wilianto Ie, an analyst at Nomura. "It might change the ability of Indomobil to find cheaper funding," he said, adding that "there has always been a presumption that if you are listed in Singapore, you have better access to funding. The financing business of Indomobil will need to issue a lot of bonds."

TT International ended up 20.3% at S$0.178 in high volume accounting for more than 9% of shares changing hands on the SGX after the company said it entered an agreement with Prima BB Ltd. and Utraco Investment Pte. to develop Big Box, a mega-warehouse retail project in Singapore, with a combined investment of S$92.0 million.

Market Summary 8th December 2012

Singapore's shares ended higher Friday amid positive cues from Wall Street as initial U.S. weekly jobless-benefit claims decreased.

The 30-share Straits Times Index ended up 28.91 points, or 0.9%, at 3107.11, after touching an intraday high of 3110.51, within spitting distance of its 3110.86 year-to-date high. The index is up 1.2% for the week; it has risen in 12 of the last 15 sessions.

"Traders anticipated some good numbers out of the Chinese economy this weekend. The local market was also buoyed by better-than-expected U.S. jobless claims last night," said Justin Harper, market strategist at IG Markets Singapore, in a note, citing China's retail sales and industrial production as among the data due Sunday. "For this bullish undertone to spark life into an end-of-year rally, we will need to see more progress on U.S. fiscal cliff talks very soon. And a strong read for tonight's non-farm payrolls report would help, once the Superstorm Sandy effect is factored in," he added.

Volume ticked up slightly from Thursday, with 1.95 billion shares valued at S$1.51 billion changing hands.

Sembcorp Marine gained 2.0% to S$4.51 after landing a contract worth US$434 million to construct two jack-up rigs for Mexico's Integradora de Servicios Petroleros Oro Negro, with delivery scheduled for the fourth quarter of 2013 and the first quarter of 2014. "(The pricing is) slightly higher than what we expected, but for the early delivery, it's in line with expectations. I think the margins on these two rigs will be pretty good," an analyst said, noting Oro Negro is a new client.

Hongkong Land rose 2.4% to US$6.76. Macquarie added the stock to its "Marquee Ideas" high-conviction Buy list. Other property plays with China exposure also rose, with CapitaLand adding 3.4% to S$3.69. "There was a boost for property stocks with links to China, such as CapitaLand, after the Chinese government said urbanisation would be a key theme for the next decade," Mr. Harper said.

Olam received a respite from its recent declines, ending up 0.7% at S$1.46, but it remains down 16.1% since Nov. 19, when negative comments from short seller Muddy Waters' founder Carson Block first surfaced. Macquarie downgraded Olam to Neutral from Outperform. "Muddy Waters' call for insolvency is a stretch. But we must accept that Olam's transformation projects are taking longer than we expected to come through," the house said in a note.

Singapore Press Holdings was the worst-performing STI component, shedding 4.1%, or 17 Singapore cents, to S$4.01 as it went ex-dividend for its planned 17-cent dividend payment. UOB KayHian said its monthly page-count monitor of SPH's flagship Straits Times suggests decent advertising-spend growth of 3%-5% on year in September-November. But the house kept a Hold call as it expects the muted advertising revenue growth to cap any gains.