Market Summary 23 February 2013

Shares in Singapore closed unchanged Friday as some traders took advantage of a sharp fall earlier in the day to buy.

The 30-share Straits Times Index closed 0.53 points higher at 3288.13 after opening in the red and slipping to as low as 3274.86. Shares had fallen 0.6% on Thursday, breaking a three-day winning streak. Gainers outnumbered losers 263 to 196 and volume was lower at 4.32 billion shares compared with 5.75 billion on Thursday.

Other Asian markets were mixed following poor economic data from Europe, while Australia rebounded from Thursday's heavy selling. Most markets on the back foot early Friday following the release of weaker-than-expected manufacturing purchasing managers' indexes from Germany and France. The absence of further bad news during Asian trading however, meant that regional markets were able to turn positive or pare their losses as the session progressed.

In Singapore, Genting Singapore was the top performer, up 3.7% at S$1.555 after the casino resorts operator Thursday evening reported a 38% drop in fourth-quarter net profit mainly because of one-time costs. However, investors likely felt confident about buying as Genting flagged a cautiously optimistic outlook as its premium-gambler business showed signs of recovery.

Noble Group closed 2.1% higher at S$1.19 after announcing a deal to sell a majority stake in a proposed palm plantation in Papua in east Indonesia to Wilmar International.

Wilmar, which separately announced a 4.7% decline in its fourth-quarter income, closed 1.4% lower at S$3.63.

Sembcorp Marine was the worst performer among the 30 STI stocks after the rig builder reported weaker income after the market closed on Thursday. Shares closed 4.7% lower at S$4.51. Shares of the parent, Sembcorp Industries, were also pulled lower by 4.0% and closed at S$5.24.

Market Summary 16th February 2013

Singapore's shares rose slightly this week, but slipped Friday in a relatively muted reaction to data showing the euro zone's economy contracted in the fourth quarter.

"Most people are fully aware across the globe that the recovery we're going through is relatively anemic," said Jason Hughes, head of premium client management at IG Markets Singapore. "We're sort of desensitized to a certain extent to a proper knee-jerk reaction, but given soft leads from Europe, it's led to declines in Asia."

Confidence doesn't appear to be badly affected, with not much selling on the books and people using dips to increase positions, he added.

The 30-share Straits Times Index ended Friday 7.40 points, or 0.2%, lower at 3283.07, finishing the holiday-shortened week with a 0.4% gain. Volume remained skewed toward penny stocks, with 6.98 billion shares valued at only 1.77 billion Singapore dollars changing hands.

"The fundamentals are quite okay," said Ng Kian Teck, an analyst at SIAS Research. "The index is at high levels. We're seeing a bit of profit-taking."

OCBC ended 0.4% lower at S$9.99 after reporting its fourth-quarter net profit rose 12% on year to S$663 million. While results were slightly above expectations, the broader market was pulling back, said Jonathan Koh, an analyst at UOB KayHian. OCBC's net interest margin contracted 5 bps from the previous quarter, he noted: "The same contraction we saw at DBS, we now see at OCBC. Some investors may take this negatively." Other financials also fell. UOB ended 0.3% lower at S$19.32, while DBS slipped 0.1% to S$15.00.

Commodity stocks were mostly lower, with Olam shedding 1.5% to S$1.64, Noble falling 1.2% to S$1.19 and Wilmar losing 1.1% to S$3.66.

On the upside, rig builder STX OSV tacked on 3.6% to S$1.285 after announcing a trifecta of contract wins to build offshore subsea construction vehicles for Norwegian companies: a 600 million Norwegian kroner contract from Solstad Offshore, a NOK800 million contract from Farstad Shipping and one from DOF Subsea for an undisclosed amount. "We view the new orders positively, as the vessels are based on STX OSV's designs and margins on these orders could surprise on the upside," OSK-DMG said in a note.

By the Way, GONG XI FA CAI

Market Summary at 2 Feb 2013

Singapore shares shrugged off some lower-than-expected China data to end at a fresh more than two-year high Friday with better-than-expected euro-zone manufacturing data likely offering a fillip in late trade.

The 30-share Straits Times Index ended up 8.48 points, or 0.3%, at 3291.14, its highest close since November 2010; the index is up 0.7% for the week.

Shares spend much of the morning slightly in the red after China's official purchasing managers index for January came in at 50.4--below December's 50.6 and the 51.0 estimate from a Dow Jones poll of economists.

"It doesn't really suggest that the recovery will be taking a turn for the worse. What it merely suggests is that there is probably a bit more risk and uncertainty surrounding the recovery and the pace of the recovery. It doesn't really change our underlying assumptions that the economy has stabilized," said Thomas Lam, group chief economist at OSK-DMG. "My suspicion is that you don't want to really overreact to that. It did come in weaker, but at the same time, it's still marginally in expansion territory," he said. He noted markets are also awaiting the key U.S. nonfarm payrolls report, due later Friday.

In late afternoon trade, shares likely got a fillip from a rally in the euro after euro-zone PMI for January came in at 47.9, up from 46.1 in December and above the 47.5 expected.

But volumes slipped, with 3.23 billion shares valued at S$1.64 billion changing hands, down from Thursday's 3.91 billion shares valued at S$2.08 billion.

"The speculators are slightly more cautious, with the data and with the level of the STI right now," said Ng Kian Teck, an analyst at SIAS Research, noting the STI's technical indicators are overbought.

Shopping-mall operator CapitaMalls Asia was the best-performing index component, climbing 3.7% to S$2.24, with an analyst saying the rise was on a Citigroup report saying the stock is its preferred pick among China retail landlords and adding the stock to its Focus List. "CMA is poised to harvest multiyear gains from sustained investment in the China consumer growth story, while earnings will be anchored by recurring income in Singapore," Citigroup said.

SingTel ended flat at S$3.50 in spite of 32%-owned associate Bharti Airtel reporting its fiscal-3Q13 net profit dropped 72% on-year to INR2.84 billion, sharply below the INR7.96 billion average forecast from a Dow Jones poll. "We have been paring down our expectations for Bharti" as well as SingTel's other associates, said Carey Wong, an analyst at OCBC.

Casino operator Genting Singapore shed 1.6% to S$1.525, erasing some of Thursday's 5.8% rise. "While its share price reacted positively to the news of Marina Bay Sands' earnings, investors may want to take profit ahead of its results on Feb. 21," said Maybank-Kim Eng, in a note. While MBS 4Q12 results were decent, driven by VIP volume growth, "the same may not necessarily be true of Genting Singapore."