Market Summary 26th January 2013

Singapore shares closed at a more than two-year high on Friday after stronger economic data in the world's two biggest economies boosted sentiment.

The Straits Times Index closed 0.6%, or 20.92 points, higher at 3,269.31, its highest intraday level. That was also the highest since Jan. 6, 2011. Volumes were lower at 3.13 billion shares compared with 3.62 billion on Thursday. Gainers outnumbered losers 296 to 174.

The local market was helped by signs of stronger manufacturing activity in China after the preliminary HSBC Manufacturing Purchasing Managers Index rose in January. It was also buoyed by falling applications for jobless benefits amongst U.S. workers to 330,000, the lowest level in five years, according to a U.S. Labor Department report published Thursday.

Singapore's industrial output fell less than expected in December, as a boost in production of drugs and medical devices helped offset another slow showing in electronics. Factory output was down 0.6% from a year earlier, the Singapore Economic Development Board said Friday, not nearly as steep a fall as economists expected.

OCBC Investment Research analyst Carey Wong said there are signs of inflows into equities from fixed income products as some investors shift into a risk-on posture. "There's some sense that perhaps interest rates [will] rise sooner than expected, and some in the market are preempting that by switching out of bonds into stocks," he said.

Wilmar International was the top performing stock as investors were likely attracted to the commodities supplier that gets a large part of its revenue from China. Shares rose 3.8% to close at S$3.84. Olam International added 0.9% to close at S$1.63 while Noble Group ended the day with a 0.8% gain at S$1.225 amid signs of an improving global economy.

Real estate stocks that were battered by a new set of property cooling measures announced by Singapore earlier this month, were also among prominent gainers. CapitaLand advanced 1.0% to S$3.98 and City Developments gained 0.4% to S$11.30.

Singapore Telecommunications, considered a safer stock because of the stable nature of its business, fell 0.6% to S$3.45.

Market Summary for 18th January 2013

Singapore shares ended higher Friday buoyed by positive China GDP growth figures and the expectation of further signs of improvement in the U.S. economy next week.

The 30-share Straits Times Index ended up 17.02 points, or 0.53%, at 3212.12--close to its highest level for the day.

The gains were in line with regional bourses which got a boost from a brightening Chinese economy as China reported 7.9% on-year GDP growth in the first quarter--the first such on-year rise since the fourth quarter of 2010.

U.S. corporate earnings and economic data will set the tone, said Ng Kian Teck, an analyst at SIAS Research. U.S. December existing home sales data are due Tuesday and new house price data Wednesday. "We expect to see further recovery in U.S. new and existing home sales and home prices data," Macquarie analysts wrote in an investor note.

Global Logistic Properties Ltd., very active as a warehouse developer in China, was among the biggest gainers in the STI adding 1.1% to close at S$2.75. The stock got upgraded Friday by Daiwa who wrote that the company's "unwavering focus on developments paves the way for strong EPS growth from FY15."

Property stocks--which have had a bumpy ride since the Singapore authorities introduced new property curbs last week--slid back again, with City Developments Ltd. the biggest decliner among STI components. It shed 1.20% to close at S$11.40.

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.

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.