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."

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.