Another hot day in the market with DBS performing an amazing upward move.
Yet I am shorting. My Allgreen has no movement... up in the morning, down in the later morning, moved back in the early afternoon and dead in the late afternoon.
Hope for a better day tomorrow :)
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Pre-Market Open Commentary for 28 July 2009
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DJIA: 9108.51 +15.27
Nasdaq Composite: 1967.89 +1.93
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Though Wall Street again closed positive overnight, the gains were more modest and could signal the start of a healthy consolidation after recent hefty gains. On the economic front, the Commerce Department said new home sales jumped 11% last month, the fastest rise in more than eight years. However, the median sales price fell to US$206,200, down 12% yoy and some 6% lower than the average in May.
On the corporate front, sentiment was muted towards Verizon Communications results, as the downturn in global revenues signaled that demand remains weak. The stock fell in active trading. The retail sector also saw cautious trading, with some selling in retail heavyweights ahead of the results announcements.
Crude for September delivery also edged up US33 cents to US$68.38 per barrel.
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In Singapore today:
It was a rousing start to the week for regional and Singapore bourses, as hopes grew for a bottoming in the economic downturn. Shares in Singapore rallied 1.71 per cent, as the Straits Times Index closed 43.23 points higher at 2,576.66. Turnover was almost feverish, with 3.19 bn shares worth $2.04 bn traded. Breadth was also positive with 2.5 gainers to each loser.
If the mood continues, the STI could look to test the 2,600 level. But the market is more likely to take the cue from Wall Street and look to consolidate at current levels. The coming results announcements would also be closely watched for guidance going forward, if indeed the corporate too see that the economy has bottomed or if they remain cautious.
We initiate coverage on Chartered Semiconductor (CSM) this morning with a Trading Buy. The group has likely seen the bottom and its valuations have yet to reflect tha t. Read the report for more details.
Read too, Kevin's blogs on why SMRT is removed from his stock pick list and whether banks have underpinned the recent rally in the STI.
Financial issues again led the charge. UOB rose 60 cents to $16.84, DBS was up 40 cents to $13.00 and OCBC 13 cents to $7.43. SingTel inched up 15 cents to $3.44 and SIA was up 24 cents to $13.62 despite rising fuel prices.
CapitalMall Trust's results came in within expectations but closed flat at $1.58 though it reached a day’s high of $1.67. The company said occupancy rates remained high and there were some recent positive rental upwards revisions. Other REITs like Capital Commercial Trust, Ascott Reits, Suntec Reits, Capital Retail China Trust and CDL Hospitality Trust also benefited from the positive sentiment. Profit taking, however, was seen in some of the property companies after the recent strength.
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Mid day July 28. STI rebounded after early selling
It was a choppy morning selling as traders wrest led control of the market's direction with profit taking balanced by positioning of rotational plays. After a session of hem and haw, the STI index rebounded 30.07 points higher at 2606.73 points. Market breadth improved over the session with 1.5 gains to every stock that declined. Turnover was 1.8bil shares with a value of $1.2bil traded.
China XLX was the toast of town with its 16.3 per cent jump at 53.5 cents as it mulls a plan for a dual listing on the Hong Kong Stock exchange. It had the effect of livening up the trading action for some S-chips here but overall cautious sentiments capped the postive impact. At least one broker issued a note advising clients to sell their China XLX shares, suggesting a discount to its Hong Kong peers may not narrow given its limited urea export. The research notes ` the listing may or not occur'. Oceanus shares eased half cent at 35.5 cents after its interim results came in within expectations. Traders said the stock was taking a b reather as it had rallied over 20 per cent in the last 10 days.
Stocks that slid today included those of Biosensors, SIA, Venture Corp, SGX, UOL, UIC, Fortune REITs, UE, Wheelock, Keppel T&T and SingTel that eased between 1 and 7 cents. On the balance, shares of Great Eastern, Jardine Strategic, DBS, Noble Group, OKP, Cosco Corp and HongKong Land rose between 1 and 56 cents.
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Tuesday 28 July 2009
Regional markets likely to trade range-bound after recent rallies
GLOBAL EQUITIES
* US stocks ended slight higher Monday, as some last-minute buying lifted key indices. Shares spent much of the day wobbling between positive and negative territories, as investors were tugged in two directions by a surprising increase in sales of new homes, and by weaker earnings reports from the health insurance, telecommunications and retail sectors.
* As a result, some investors rotated into financial shares, lifting the sector. Upbeat data on new home sales also underpinned the upturn in financial stocks.
* The Commerce Department reported that lower prices sent new-home sales soaring in June. Economists said the figures offered more evidence that housing was bottoming out.
* Monday was a relatively light day for corporate earnings, which have captured investors' attention recently. Of the 202 companies that have reported earnings, 77% have beaten expectations, according to data compiled by Thomson Reuters.
* On Monday, the 30-stock Dow Jones Industrial Average finished higher by 15.27 points, or 0.17%, at 9,108.51.
* The broad Standard & Poor's 500-stock index added 2.92 points, or 0.30%, to 982.18. The tech-heavy Nasdaq Composite index gained 1.93 points, or 0.10%, to 1,967.89.
* Emerging-market stocks and bonds rose Monday, as rising commodity prices boosted energy producers and consumer confidence in South Korea jumped to the highest in seven years.
* The MSCI Emerging Markets Index, the benchmark of equities in 22 developing nations added 1.2% to 833.66.
* Brazil's Bovespa stock index edged up by 0.2% to 54,548.99, the highest in almost 11 months. The Russian stock market's Micex Index rallied 0.9%, led by gains in oil producers.
GLOBAL BONDS
* US Treasury prices fell Monday, pushing their yields higher due to the prospect of billions more in new government debt supply this week.
* However, the government's re-opened auction of $6 billion in 20-year Treasury inflation protected securities (TIPS) went well, attracting a robust bid-to-cover ratio.
* The yield on the benchmark 10-year note rose to 3.72%, its highest levels since late last month, and up from 3.66% on Friday.
COMMODITIES
* NYMEX crude oil prices rose 0.5% to settle at $68.38, tracking a rebound in US equities that boosted sentiment that the global economic slowdown may be easing.
* Traders said that key influences for oil prices are the US dollar, technical buying and future demand prospects.
* They added that market players are aware of abundant oil supplies, while uncertainty prevails over how strong the economy is going to be.
* Comex gold futures climbed $0.40 to $956.30 an ounce in New York as the US dollar retreated, supporting demand for the precious metal as an alternative investment.
HONG KONG
* Traders said they expect the ample liquidity in the territory to continue to lend near-term support to the blue-chip index, which could test 20,500 this week.
* Friday's gains on Wall Street also helped the blue-chip Hang Seng Index rise 268.83 points, or 1.35%, to 20,251.62 Monday, its highest closing level since 20,491 on 9 September.
* "The momentum is still strong, fueled by strong liquidity inflows," said Peter Lai, a director at DBS Vickers Securities. "But I expect the Hang Seng Index to see more profit-taking pressure with the index facing strong resistance at 20,800-21,000."
* Separately, continued fund inflows have prompted the Hong Kong Monetary Authority to sell a total HK$33.73 billion in the foreign-exchange market since 17 July, to maintain the Hong Kong dollar's peg to the US dollar, according to Dow Jones Newswires.
SINGAPORE
* The Straits Times Index closed up 1.7%, or 43.23 points, at 2,576.66 points Monday, tracking regional indices, as investors remained upbeat about corporate earnings and the pace of the global economic recovery.
* According to a retail research, the index should break the 2,600 level soon as buying momentum remains strong.
* Another analyst said he believes that the present uptrend has not yet run its full course.
CHINA
* Analysts said a liquidity-driven asset bubble fuelled by Beijing's relatively loose monetary policy appeared to be forming, adding the high-liquidity environment would likely push the market higher in the short term.
* A stellar debut by toll-road operator Sichuan Expressway, the first company to list on the Shanghai exchange in nearly a year, prompted across-the-board gains Monday.
* The benchmark Shanghai Composite Index, which tracks both yuan-denominated A shares and foreign-currency B shares, ended up 1.9% at 3435.21,
* Analysts also said investors who failed to buy any shares in China State Construction Engineering's IPO offering last week returned to the secondary market Monday.
CURRENCIES
* The US dollar dropped against most rival currencies as investors remained inclined to embrace risk despite stock markets that failed to gain traction during the session.
* That climate benefited more risk-sensitive currencies such as the euro and Canadian dollar while weighing on safe havens such as the dollar and the Japanese yen.
* Late Monday afternoon in New York, the euro was at $1.4233 from $1.4212 late Friday.
* The yen came under particular selling pressure after the release of a better-than-expected U.S. June new home sales report. Late Monday afternoon in New York, the US dollar was at Y95.19 from Y94.69.
* A higher-than-expected US dollar-Chinese yuan central parity rate reinforced the market's view Beijing will continue to maintain a stable yuan, leaving the local currency unchanged against the greenback Monday despite the US dollar's weakening against the euro Friday.
* On the over-the-counter market, the US dollar ended at CNY6.8310 Monday afternoon in Asia, unchanged from both Friday and Thursday's closing levels.
* Traders said they expect strategic talks between China and the US later Monday to have little impact on Chinese yuan trading.
* Australian Dollar: The Australian dollar climbed against the greenback on optimism from US housing data, increasing demand for higher-yield assets. The Aussie was trading at $0.8228 Tuesday morning in Sydney.
* However, traders said that gains in Australia's currency may be limited before a speech by Reserve Bank of Australia Governor Glenn Stevens on speculation he may signal a change in the bank's monetary policy amid better economic data.
* New Zealand Dollar: The New Zealand dollar slipped a tad after the nation's annual trade deficit unexpectedly widened in June, as aircraft purchases pushed imports to a six-month high. New Zealand's dollar bought $0.6563 Tuesday morning in Asia.
* The Singapore dollar was flat in Asian trade late Monday despite gains in local stocks, as uncertainties about the pace of a global economic recovery persist. USD/SGD was at 1.4409.
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Market close July 28. STI crosses 2,600
Today, the STI index cleared another hurdle at 2600 resistanc e and put on 48.580 points at 2625.24 points. This was after an initial setback at 2564.77 points on profit taking. Market breadth improved over the session with 2 gains to every stock that declined. Turnover was 3bil shares with a value of $2.2bil traded. The undertone remained firm and sentiment has been extremely positive.
China XLX was the toast of town with its 17.3 per cent jump at 54 cents as it mulls a plan for a dual listing on the Hong Kong Stock exchange. It had the effect of livening up the trading action for some S-chips here but overall cautious sentiments capped the positive impact. At least one broker issued a note advising clients to sell their China XLX shares, suggesting a discount to its Hong Kong peers may not narrow given its limited urea export. The research notes ` the listing may or not occur'. The positive spin from this was a resurgent interest in S-shares as sidelined money hunts for more `laggard' names. Shares of Yangzijiang, Cosco Corp, P ac Andes, Sinotel, Midas, China Fishery, Jiutian Chemical, Sunvic and Synear Food rose between 1 and 6 cents.
Rising higher today were shares of DBS, Great Eastern Holdings, UOB, Jardine C&C, City Developments, Keppel Corp, OUE, CapitaLand, Noble Group, DairyFarm and OCBC Bank that gained between 5 and 72 cents.
On the balance, shares of SIA, Fortune REITs, SIA Engineering, STX PanOcean, Kim Eng, UE, HongKong Land and SingTel eased between 1.5 and 44 cents.
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