Proper Trading Needs Multiple LCD Monitors

This is a picture of my trading buddy set up :)

These are the 22 inch Samsung UbiSync 2243QW monitors. These Samsung monitors allowed you to connect to PC via USB (instead of DVI or VGA) so that you will not need a video card with dual output. USB connectors are easier to get than an expensive dual output video card.

The screens are currently showing the MT4 FX Trading platform with the "Trend Follower" template. See Forex Factory forum posting on this method: here.

30 Oct 09 : Sold Ezra

Sold my Ezra 1 hour after market open. Wish it can go higher but I dun wish to go into the weekend with the shares.. So I sold it at $1.95.. Happy to go into weekend positive... and relaxed.

Hope for a great week ahead.

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Pre-Market Open Commentary for 30 October 2009
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DJIA: 9962.58 +199.89
Nasdaq Composite: 2097.55 +37.94
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The US market staged a broad-based advance on Thursday following a report of a stronger-than-expected economic growth in the third quarter which provided investors assurance that economic recovery is on track. GDP grew at an annualised rate of 3.5% in the third quarter, ahead of expectations of a 3.2% annualised rate, from a decline of 0.7% annualized rate in the second quarter, partly fueled by a slowdown in the pace of business reducing inventories but also short-term government stimulus programs. However, reports on the job market conditions were mixed, with the weekly jobless claims improving marginally to 530,000 last week, but worse-than-expectations of 525,000, from 531,000 the previous week. Continuing claims, however, fell to 5,797,000, better-than-expectations of 5,905,000, from 5,945,000 the week before.

All the major indices rallied strongly, with the Dow Jones Industrial Average advancing 2.05% and S&P 500 gained 2.25% to end at 1066.11. Nasdaq composite rose 1.84%.

On Friday, the result of Chevron is due. On the economic front, reports on personal income and spending, consumer sentiment and manufacturing are also due on the same day.

US light crude oil for December delivery gained US$2.44, or 3.1%, to settle at US$79.87 a barrel.

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In Singapore today:

The Asian markets suffered a third day of sell-down on Thursday as gloomy news from the US once again cast doubts on the pace of the global economic recovery. In particular, technology-dominated bourses such as Taipei and Seoul were badly hit, with the Taiwan’s Taiex Index and South Korea’s Kospi falling 2.37% and 1.48% respectively, over concerns on the prospects for orders linked to Christmas sales from manufacturers listed on both bourses. Japan’s Nikkei also lost 1.83%. In contrast, the Straits Times Index slipped modestly 16.67 points, or 0.63%, lower to close at 2632.31 as the Singapore blue chips such as banks and property developers have business roots in the relatively vibrant domestic economy. For every stock that rose, 1.84 fell. The overall trading volume was 1.73 bil shares with a value of S$1.61 bil.

Companies with extensive international exposures took some hits with SingTel falling 6 cents to $2.98 and CapitaLand losing 7 cents to $4.08. UOB, also fell 22 cents to $16.72, ahead of its third-quarter results today and DBS fell 6 cents to $12.92. Bucking the trend was OCBC which gained 12 cents to $7.65 following the release of third-quarter results that topped expectations.

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Mid day October 30. Asian Markets rally following US’ positive lead

US stocks rallied with its k ey indices putting on about 2 per cent helped by a technical pullback on the US dollar. After recent sessions of profit taking in equities, the better than expected read in the third quarter GDP data pushed the indices to their best gains since July. Asian markets were higher following the US' positive lead. The STI index rose 38 points at 2670.67 points. For every stock that fell, 4 rose. Turnover was 1058mil shares with a value of $875 mil traded.

The day started off bright with broad gains on talks of short covering and bargain hunting. Shares of SATs Services, Straits Asia, Ezra, Noble Group, Indo Agric, Jardine Matheson, Jardine Strategic, UOB, Jardine C&C, SGX, City Developments, CapitaLand, Wilmar and Semb Marine rose between 3 and 40 cents. Dealers said investors were still generally cautiously optimistic about the outlook going forward. `Do expect some choppy trading as the market reacts to corporate reporting and a slew of economic data from the US and the region' a trader noted.

NOL failed to sizzle today after its third quarter earnings fell below expectations, despite expectations that its third quarter was seasonally its best quarter. The stock closed 3 cents lower at $1.59. Shares of Lifebrandz tripped up and fell half a cent at 1 cent after it was served with a writ of summons for an alleged breach of contracts. `In the said Writ, M/s Giorgio Ferrari Pte Ltd are claiming for an alleged sum of $5,818,973.48 in damages as well as alleged sum of $699,308.99 by way of a refund'.



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29 Oct 09 : Buy Ezra

Bought Ezra today at $1.90, only to watch it drop to as low as $1.86.. luckily it recovered in late afternoon to reach back to $1.90.

Hope for the best :)


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Pre-Market Open Commentary for 29 October 2009
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DJIA: 9762.69 -119.48
Nasdaq Composite: 2059.61 -56.48
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Wall Street tumbled on Wednesday, led by technology-dominant Nasdaq, following a surprise weaker-than-expected new home sales report. New home sales unexpectedly fell 3.6% to 402,000 unit annualized rate in September, below expectations of 440,000 units annualized rate, from 417,000 unit annualized rate in August, representing a road bump to recovery that otherwise appeared to be widening. A separate economic report showed a 1% increase in new orders for long-lasting manufactured goods in September, which met Wall Street expectations, after falling 2.6 in August. In the financial sector, reports that GMAC Financial Services is seeking a third bailout from the Treasury Department further led the downside pressure.

All the major indices ended lower, with the Dow Jones Industrial Average falling 1.21% and S&P 500 slipping 1.95% to end at 1042.63. Nasdaq composite tumbled the hardest, falling 2.67%.

Thursday brings the key economic report for the week, with the highly-anticipated first reading on third-quarter GDP growth, which is expected to grow at an annualized rate of 3.2%, after shrinking at a 0.7% annualized rate in the second quarter. The weekly jobless claims report and results of Exxon Mobil, Procter & Gamble and MetLife are also due on the same day.

US light crude oil for December delivery fell US$2.09 to settle at US$77.46 a barrel.

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In Singapore today:

After a seven-month-long rally, the regional markets showed signs of fragility, suffering its biggest fall in three weeks as investors fled back to the relatively safety of the US dollar following a range of weak consumer data from the US. The tumble in technology shares traded on Nasdaq further triggered a sell-down in technology-dominated stock exchanges such as Seoul and Taipei, leading to a 1.61% and 2.41% slump in Taiwan’s Taiex Index and South Korea’s Kospi Index respectively. The Singapore benchmark Straits Times Index fell 45.52 points, or 1.7%, to finish at 2648.98. For every stock that rose, 3.90 fell. The overall trading volume was 1.60 bil shares with a value of S$1.50 bil.

Expect the market to retreat today taking cues from the slump in Wall Street overnight. Despite the increasing gloom on the global front, an upbeat set of results from OCBC will bring some cheers to investors. Read more about OCBC results today from an update report by our banking analyst.


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Mid day October 29. Asian markets fell following slump in US indices

US indices slumped led by the Nasdaq's 2.7 per cent fall as traders made a beeline for the exit on worries about the economic recovery. The CBOE volatility index; the benchmark for fear, jumped 12.4 per cent. The US dollar index strengthened further and precipiated worries about the `carry trade unwind'. Asian markets tumbled from the open bell falling between 2 and 3 per cent. The STI index fell 19.02 points at 2629.96 points; modestly less than its counterparts as `it rose less than its peers in the corresponding period'. For every stock that rose, 5 fell. Turnover was 853mil shares with a value of $873mil traded.
Shares of OCBC Bank bucked the trend with its positive earnings report yesterday that beat market expectations. It closed 10 cents up at $7.63. DBS which was suppose to report on 6th November rose 14 cents at $13.12 spark talks of short covering. As this was the last day of the October month futures contracts for the MSCI Singapore index, traders mused if the intraday swings in the blue chips were due to arbitraging by futures traders. Shares of Jardine Matheson, Jardine Strategic, DairyFarm, SMRT and Hyflux rose between 1 and 76 cents.
On the balance, shares of Jardine C&C, Genting, Yanlord, UOB, Noble Group, Wilmar, IndoAgric, Olam, Straits Asia, Ezra and SATs Services fell between 2 and 70 cents.




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28 Oct 09 : Another Red Day

Pre-Market Open Commentary for 28 October 2009

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DJIA: 9882.17 +14.21
Nasdaq Composite: 2116.09 -25.76
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The US market closed mix with the Nasdaq tumbling and the Dow managing a small gain on Tuesday following a surprisingly weak reading on consumer confidence and selloff in tech but a rally in energy sector gave Dow a lift. The energy sector was lifted by the results of BP, which reported weaker quarterly earnings and revenue due to lower oil prices but ahead of expectations, notwithstanding larger-than-expected quarterly losses of Valero Energy, the largest US oil refiner.

The economic readings were mixed but the critical consumer sentiment reading took a plunge with the Consumer Confidence Index falling to 47.7 in October, lower than expectations of 53.5, from 53.4 in September, reflecting the impact of rising unemployment and negative wealth effect from housing. Home price index, on the other hand, rose 1.2% in August, for the fourth consecutive month, after climbing 1.6% in July.

The Dow Jones Industrial Average edged marginally 0.14% up but S&P 500 lost 0.33% to end at 1063.41. Nasdaq composite tumbled 1.20%.

On Wednesday, we expect the results of ConocoPhilips, General Dynamics and WellPoint. But the dominant report for the week is the highly-anticipated first reading on third-quarter GDP growth.

US light crude oil for December delivery rose US$0.87 to settle at US$79.55 a barrel.



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In Singapore today:

The rebound in greenback, raising fears of US dollar unraveling, led to a sell-down in most regional markets. The Hang Seng index shed close to 2%, possibly also due to pent-up selling from a Monday holiday in Hong Kong.

The Singapore shares started the day broadly lower but managed to bounce off their nadirs on bargain hunting but declined again in the afternoon as US futures contracts remained lackluster. The Straits Times Index slipped 22.12 points, or 0.81%, to finish at 2694.50 following a sell-off in the bank and property stocks that led the recent rally. Investors also shied away from penny stocks despite the restructuring themes making the rounds. For every stock that rose, 3.49 fell. The overall trading volume was lower at 1.52 bil shares with a value of S$1.26 bil.

Shares of Oceanus rose half-a-cent at 36.5 cents on talks that the company may plan the listing of Taiwanese Depository Receipts. Transcu remained the most actively traded stock for the fourth straight day, closing unchanged at 12 cents. But the volume of 50.9mil shares traded was less than half the 118 mil shares that changed hands last Thursday, reflecting the muted activity yesterday.

Expect market sentiment to remain cautious and trading activity to remain muted today as investors await fresh confirmations that an economic recovery is on track


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Mid day October 28. Strengthening US dollars likely cause of sell-down.


A strengthening of the US dollars probably led to the unwinding of the carry trades and subsequent weakening of commodities and Asian equities.
`The correlation is notable and the recent strengthening of the US dollars has led to softer resource prices and Asian equities generally' a dealer said. The STI index fell 24.19 points at 2670.31 points, pacing the regional declines of between 0.3 and 1.6 per cent. For every stock that rose, 3 fell. Turnover was 792mil shares with a value of $695mil traded.
Sentiments were bad as traders reminisced about the fateful day one year ago when the STI index plunged 8 per cent only to recover late in the day. The weak session was leading to stops being triggered, spurring fears of more selling to come in the afternoon. Keenly watched stocks like Ezion, YingLi, Ezra, SinoTel, Seroja and Genting fell between 1.5 and 4 cents as traders liquidated their positions. Resource issues like Straits Asia, Olam, Indo Agric and Noble Group fell between 2 and 6 cents. Others like Jardine Strategic, Jardine Matheson, Jardine C&C, STX Pan Ocean, UOB, UOL, CapitaLand, SIA and CapitalMall Trust that fell between 3 and 52 cents.
On the balance, shares of Parkway, DBS, Goodpack, OCBC bank, Great Eastern, DBS, M1. DBS, Guocoland, Kim Eng and Biosensors rose between 1 and 6 cents.

Forex Scalping – Extensive guide on how to scalp forex

Forex Scalping – Extensive guide on how to scalp forex.


Forex scalping is a popular method involving the quick opening and liquidation of positions. The term “quick” is imprecise, but it is generally meant to define a timeframe of about 3-5 minutes at most, while most scalpers will maintain their positions for as little as one minute.

The popularity of scalping is born of its perceived safety as a trading style. Many traders argue that since scalpers maintain their positions for a brief time period in comparison to regular traders, market exposure of a scalper is much shorter than that of a trend follower, or even a day trader, and consequently, the risk of large losses resulting from strong market moves is smaller. Indeed, it is possible to claim that the typical scalper cares only about the bid-ask spread, while concepts like trend, or range are not very significant to him. Although scalpers need ignore these market phenomena, they are under no obligation to trade them, because they concern themselves only with the brief periods of volatility created by them.

Forex scalping is not a suitable strategy for every type of trader. The returns generated in each position opened by the scalper is usually small; but great profits are made as gains from each closed small position are combined. Scalpers do not like to take large risks, which means that they are willing to forgo great profit opportunities in return for the safety of small, but frequent gains. Consequently, the scalper needs to be a patient, diligent individual who is willing to wait as the fruits of his labors translate to great profits over time. An impulsive, excited character who seeks instant gratification and aims to “make it big” with each consecutive trade is unlikely to achieve anything but frustration while using this strategy.

Scalping also demands a lot more attention from the trader in comparison to other styles such as swing-trading, or trend following. A typical scalper will open and close tens, and in some cases, more than a hundred positions in an ordinary trading day, and since none of the positions can be allowed to suffer great losses (so that we can protect the bottom line), the scalper cannot afford to be careful about some, and negligent about some of his positions. It may appear to be a formidable task at first sight, but scalping can be an involving, even fun trading style once the trader is comfortable with his practices and habits. Still, it is clear that attentiveness and strong concentration skills are necessary for the successful forex scalper. One does not need to be born equipped with such talents, but practice and commitment to achieve them are indispensable if a trader has any serious intention of becoming a real scalper.

Scalping can be demanding, and time-consuming for those who are not full-time traders. Many of us pursue trading merely as an additional income source, and would not like to dedicate five six hours every day to the practice. In order to deal with this problem, automated trading systems have been developed, and they are being sold with rather incredible claims all over the web. We do not advise our readers to waste their time trying to make such strategies work for them; at best you will lose some money while having some lessons about not trusting anyone’s word so easily. However, if you design your own automated systems for trading (with some guidance from seasoned experts and self-education through practice) it may be that you shorten the time which must be dedicated to trading while still being able to use scalping techniques. And an automated forex scalping technique does not need to be fully automatic; you may hand over the routine and systematic tasks such as stop-loss and take-profit orders to the automated system, while assuming the analytical side of the task yourself. This approach, to be sure, is not for everyone, but it is certainly a worthy option.

Finally, scalpers should always keep the importance of consistency in trade sizes while using their favored method. Using erratic trade sizes while scalping is the safest way to ensure that you will have a wiped-out account in no time, unless you stop practicing scalping before the inevitable end. . Scalping is based on the principle that profitable trades will cover the losses of failing ones in due time, but if you pick position sizes randomly, the rules of probability dictate that sooner or later an oversized, leveraged loss will crash all the hard work of a whole day, if not longer. Thus, the scalper must make sure that he pursues a predefined strategy with attention, patience and consistent trade sizes. This is just the beginning, of course, but without a good beginning we would diminish our odds of success, or at least reduce our profit potential.

Now let’s take a look at the contents of this article where forex scalping is discussed with all its details, advantages and disadvantages. Our suggestion is that you peruse all of this article and absorb all the information that can benefit you. But if you think that you’re already familiar with some of the material, to shorten your route, we present the table of contents of this article.

Contents

1. How scalpers make money: Here we will take a look at the logic behind scalping, and we’ll discuss the best conditions and necessary adjustments which must be made by a scalper for profitable trading.

2. Choosing the right broker for scalping: Not every broker is accommodative to scalping. Sometimes this is the stated policy of the firm, at other times the broker creates the conditions which make successful scalping impossible. It is important that the novice scalper know what to look for in the broker before opening his account, and here we’ll try to enlighten you on these important points.

3. Best currencies for Scalping: There are currency pairs where scalping is easy and lucrative, and there are others where we advise strongly against the use of this strategy. In this part we’ll discuss this important subject in detail and give you usable hints for your trades.

4. Best times for Scalping: There is an ongoing debate about the best times for successful scalping in the forex market. We’ll present the various opinions, and then offer our own conclusion.

5. Strategies in Scalping: Strategies in scalping need not differ substantially from other short-term methods. On the other hand, there are particular price patterns and configurations where scalping is more profitable. We’ll examine and study them in depth in this section.
a. Range Scalping: Some traders consider ranging markets better suited for scalping strategies. Here we’ll examine why, and how to scalp under such conditions.
b. Breakout Scalping: We’ll examine news breakouts, and technical breakouts separately and discuss suitable scalping strategies for both.
c. Trend Scalping: Here we’ll take a general look at forex scalping in trending markets.

6. Trend Following while Scalping: Trends are volatile, and many scalpers choose to trade them like a trend follower, while minimizing the trade lifetime in order to control market risk. In this part we’ll examine the usage of Fibonacci extension levels for scalping trends.

7. Disadvantages and Criticism of Scalping: Scalping is not for everyone, and even seasoned scalpers and those committed to the style would do well to keep in mind some of the dangers and disadvantages involved in using the style blindly.

8. Conclusions: In this final section we’ll combine the lessons and discussions of the previous chapters, and reach at conclusions about who should use the forex scalping trading style, and the best conditions under which it can be utilized.

27 Oct 09 : Bloody Red in Singapore Market

Luckily I let go of my CPF Yanlord yesterday at $2.51 :)

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Pre-Market Open Commentary for 27 October 2009
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DJIA: 9867.96 -104.22
Nasdaq Composite: 2141.85 -12.62
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After the Dow briefly hit the 10,000 level, the US market tumbled as greenback firmed up, on the back of a stronger-than expected Treasury auction, pressuring dollar-traded commodities and big multinationals that benefited from the weak dollar. The financial sector further dragged down the market following reports over the weekend that Bank of America’s plans to repay federal bailout money may have hit some roadblocks and the filing for bankruptcy protection on Sunday by Capmark Financial, one of the country’s largest commercial real estate lenders.

The major indices retreated, with the Dow Jones Industrial Average losing 1.05% while S&P 500 lost 1.17% to end at 1066.95. Nasdaq composite slipped 0.59%.

Tuesday brings quarterly results of BP and Valero Energy as well as economic readings on durable goods orders in September, Case Shiller home price index for August and the October Consumer Confidence index.

US light crude oil for December delivery fell US$1.82 to settle at US$78.68 a barrel.

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In Singapore today:

Trading activity was light on Monday with blue chips moving within a tight price range as investors awaited the release of third-quarter results from big companies, including CapitaLand (Tuesday), followed by OCBC (Wednesday) and UOB Bank (Friday). The STI index edged marginally 1.28 points up to close at 2716.62, after hitting a fresh intra-day high of 2723.01. Interest in penny stocks also languished as investors became weary of restructuring stories that has been circulating. As a result, market volume fell to three-month low of 1.27 bil shares with turnover at $952.26 mil. For every stock that rose, 1.3 fell.

Active issues included Transcu, falling one cent to 12 cents on a volume of 94 mil shares as well as Macquarie International Infrastructure Fund, gaining 4.5 cents to 41 cents with 40.4 mil shares traded after agreeing to sell 71.6% of its interest in a European infrastructure fund for $132 mil.

Expect the Singapore market to retrace today taking cues from the weak US market close overnight and as caution rules with growing debate over the sustainability of the seven-month market rally due to “rich valuations and lack of any substantial earnings upgrade potential”, according to one foreign broker.

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NRA Mid day October 27. Asian markets slide following US dollar spike


US stocks finished lower led by financials and commodities as the US dollar rebounded. With the US dollar now the most popular carry trade in the world, its movements has big ramifications across asset classes. Traders saw yesterday's US markets' movement as significant as key indices there reversed an early 1 per cent gain to end the day 1 per cent down. Asian markets fell with the Hang Seng index shedding almost 2 per cent; pent up selling from yesterday's holiday was the most plausible reason. The Straits Times index fell 13.53 points at 2703.09. For every stock that rose, 4 fell. Turnover was 775mil shares with a value of $626mil traded.

Singapore shares started the day broadly lower but had managed to bounce off their nadirs on bargain hunting. Shares of Oceanus rose half cent at 36.5 cents on talks the company may plan the listing of Taiwanese Depository Receipts. Financial One rose half cent at 59 cents as investor optimism grew that the recent placement of shares had gone to strategic institutional investors. Shares of C2O and Swissco remained halted today on talks that a strategic deal between the 2 companies would be announced.

Stocks that fell today included Jardine C&C, SIA, City Developments, UOB, OCBC bank, HPL, Bukit Sembawang and IndoAgric that eased between 5 and 44 cents.

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Market close Oct 27. No fresh factors to lift market sentiment

Regional traders obviously saw Wall Street’s overnight fall as significant as key indices there reversed an early 1 per cent gain to end the day 1 per cent down. Asian markets fell with the Hang Seng index shedding almost 2 per cent; pent up selling from yesterday's holiday was the most plausible reason. The Straits Times index fell 22.12 points at 2,694.50. For every stock that rose, 4 fell. Turnover was 1.52bil shares with a value of $1.26bil traded.

Singapore shares started the day broadly lower, managed to bounce off their nadirs on bargain hunting but declined again in the afternoon as US futures contracts remained lackluster.

Shares of Oceanus rose half cent at 36.5 cents on talks the company may plan the listing of Taiwanese Depository Receipts. Also busy were Transcu, closing unchanged at 12 cents on 50mil and Genting, down 1 cent to $1.10 with 42mil done.

Top gainers for the day included UOI, up 6 cents to $3.02, Parkway, up 5 cents to $2.60 and Cerebos, up 3 cents to $3.40.
Top losers were Jardine C&C, down 42 cents to $24.80, City Dev, down 22 cents to $10.24 and SIA, down 13 cents to $4.13.





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26 Oct 09 : Another Directionless Day

Pre-Market Open Commentary for 26 October 2009
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DJIA: 9972.18 -109.13
Nasdaq Composite: 2154.47 -10.82
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The US market seesawed last week and ended the week down. Stocks retreated on Friday with the Dow giving up the 10,000 level as the greenback strengthened, causing downside pressure on dollar-traded commodities including oil, which in turn dragged down energy shares. Big multinational that benefited from a weak dollar also slipped. Stocks tumbled despite better-than-expected results from Microsoft and Amazon and encouraging reading on existing home sales, which jumped to 5.57 mil unit annual rate in September, above expectations of 5.35 mil unit annual rate, from 5.1 mil unit annual rate in August.

For the week, the major indices were virtually flat, with the Dow Jones Industrial Average dipping 0.002% while S&P 500 dipped 0.007% to end at 1079.60. Nasdaq composite slipped 0.001%.

Expect sentiment this week to be dominated by corporate results (including Verizon on Monday as well as BP and Valero Energy on Tuesday) and economic readings on housing, jobs, income and the first reading on third-quarter GDP, which is expected to have risen at a 3.1% annualised rate after sliding in the previous quarter.

US light crude oil for December delivery fell US$0.69 to settle at US$80.50 a barrel.

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In Singapore today:

The trading week ended on an upbeat note on Friday as regional stock indexes jumped to new highs for the year, boosted by Wall Street’s overnight rally. The advance in share prices was due to a slew of better-than-expected reports from US multinational giants such as Microsoft and Apple. For the week, the benchmark Straits Times Index (STI) gained 7.22 points to a fresh one-year high of 2715.34.

Despite the market exuberance, there are lingering doubts on the durability of the rally in view of the weak unemployment conditions in developed economies despite improving economic data. Also, although many US firms have reported improving profits in their third-quarter results, but that often were due to cost-cutting rather than improving sales. There were further concerns that the economic rebound of countries, including China, was largely driven by huge government stimulus package.

We expect the Singapore market sentiment to be cautious at the start of the week given Wall Street’s weak close on Friday and uncertain economic climate.


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Mid day October 26. Asian stocks mostly higher despite tumble in US equities.

Asian markets were mostly higher despite the tumble in US equities on Friday. Dealers attributed the buying to fresh funds inflow amid increasing signs of an improvement in the economy. The STI index rose 3.09 points at 2718.43 points in a session of listless trading. Market breadth was flat at best with most investors keeping to the sidelines in the absence of fresh leads. Turnover was 722mil shares with a value of $488mil traded.
The Hang Seng was closed for a holiday today and was a reason for the general lethargic trading session here. Despite a contract win announced over the weekend, shares of UnitedEnvirotech had little buzz as traders mused over the BOT secured in Hegang City, Heilongjiang province.
UnitedEnvirotech finished half cent down at 41cents while stakeholder Novena was unchanged at 20 cents. Shares of Transcu shed 1 cents at 12 cents on talks of forced selling. The stock had plunged over 20 per cent last week when a local broker imposed a trading restriction on it.

Financial One shares rose 2 cents at 56.5 cents on talks that a new strategic stakeholder may emerge. It was announced over the weekend that substantial shareholder Jeffrey Koo had sold 29.65mil shares to `brokers who sold the shares to identified purchasers known to them'. After a block of 40.5 mil shares were crossed at 40 cents, Guthrie rose 3 cents at 42 cents as excited traders buzzed around the counter.

On the balance, shares of Jardine Matheson, Jardine Strategic, UOL, Venture Corp, SGX, City Developments, UE, Creative Technology and Haw Par eased between 2 and 22 cents.

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Market close Oct 26. STI flat despite some signs of buying returning

A lack of fresh factors kept p rices sidelined despite some signs of buying by fresh funds inflow amid increasing signs of an improvement in the economy. The STI index rose 1.28 points at 2716.62 points in a session of listless trading. Market breadth was skewed a little to the negative with most investors keeping to the sidelines in the absence of fresh leads. Turnover was 1.27bil shares with a value of $952mil traded.

The Hang Seng was closed for a holiday today and was one of the reasons for the general lethargic trading session here. Despite a contract win announced over the weekend, shares of UnitedEnvirotech had little buzz as traders mused over the BOT secured in Hegang City, Heilongjiang province. UnitedEnvirotech finished one cent down at 40.5cents while stakeholder Novena was unchanged at 20 cents.

Shares of Transcu shed 1 cents at 12 cents on talks of forced selling. The stock had plunged over 20 per cent last week when a local broker imposed a trading restriction on it.

Financial One shares rose 4 cents at 58.5 cents on talks that a new strategic stakeholder may emerge. It was announced over the weekend that substantial shareholder Jeffrey Koo had sold 29.65mil shares to `brokers who sold the shares to identified purchasers known to them'. After a block of 40.5 mil shares were crossed at 40 cents, Guthrie rose 3 cents at 42 cents as excited traders buzzed around the counter.

On the balance, shares of Jardine Matheson, Jardine Strategic, UOL, DBS and Haw Par eased between 4 and 12 cents.

23 Oct 09 : Market Rally (Finally)

Pre-Market Open Commentary for 23 October 2009
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DJIA: 10081.31 +131.95
Nasdaq Composite: 2165.29 +14.56
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Wall Street sparked a rally on Thursday following better-than-expected results from Travelers, AT&T, McDonald’s and 3M. On the economic front, the Conference Board reported an improvement in its index of leading economic indicator by 1% in September, ahead of expectations of a 0.8% gain, further propelled the advance. Notwithstanding an improvement in economic sentiment, the labour market conditions remained abysmal, with the number of first-time unemployment claims increasing by 11,000 to 531,000 last week, exceeding expectations of 515,000, from 520,000 the previous week.

The major indices rallied with the Dow Jones Industrial Average gaining 1.33% while S&P 500 rose 1.06% to end at 1092.91. Nasdaq composite gained 0.68%.

Friday brings the results of major companies including Microsoft, Honeywell, Exelon, Whirlpool and Schlumberger.

US light crude oil for December delivery fell US$0.18 to settle at US$81.19 a barrel, edging off one-year high.

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In Singapore today:

The regional markets drifted further following the release of slightly lower-than-expected Chinese third-quarter growth data of 8.9% (expectations was 9.1%) yesterday and investor concerns over the sustainability of mainland growth. The STI index retraced from the 2700 mark to end 10.58 points lower at 2681.97, in the absence of fresh corporate lead and mix company results on the international front. For every stock that rose, 2.46 fell. Overall market volume was healthy with turnover of 1.76bil shares with a value of S$1.59 bil traded.

Trading interest was confined to “situational stocks” and losses in the Hong Kong market translated to a weaker market for S-chips and penny stocks. Among the S-chip losers were shipbuilders Yangzijiang which fell 1.5 cents to 99.5 cents with 15.2 mil shares traded and Cosco Corp which lost 4 cents to $1.15 on 11.95 mil shares. For penny stocks, one big loser was Transcu which dropped 2.5 cents to 13 cents on heavy volume of 118.1 mil shares when it resumed trading yesterday following the company’s placement of 320 mil shares at 9.6 cents per share.

Decliners from blue-chips included DBS Group, UOB Bank, SGX.

Following two-days of retracement, expect the Singapore market to rebound taking cues from the rally in the US market overnight as well as encouraging corporate results on the local front. There may, however, be some profit-taking in the second session ahead of the weekend, leading the STI to close off the day’s high.

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Mid day October 23. Asian markets driven higher by China market's charge
US shares staged a re bound on good corporate results and investors shrugged off a diasappointing jobless claims report. Asian markets were driven higher led by Mainland China's 1.8 per cent charge. The widely followed Hang Seng Index rose to fresh 2009 highs, gaining 1.6 per cent. The STI index rose 33.89 points at 2715.86 points. For every stock that fell, 3 rose. Turnover was 903mil shares with a value of $811mil traded.

Yesterday we were `slip, sliding away' and today, traders returned with more firepower and a little more urgency. Resource stocks like Noble Group, IndoAgric, Golden Agric and Straits Asia rose between 1 and 14 cents on renewed buying vigour given the dollar's weakness.

Financial One rose 2.5 cents at 53.5 cents on institutional interest after a block of 24.5mil shares was crossed off market at 43 cents yesterday. Sources said the block of shares went to institutional investors.

Others like Jardine Matheson, Jardine Strategic, SIA, Jardine C&C, UOB and Yanlord rose between 5 and $1.20.
On the balance, shares of K-REIT, Mermaid, Hyflux, M1, New Toyo and HPL eased between 1 and 13 cents.



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22 Oct 09 : Market Update

Pre-Market Open Commentary for 22 October 2009
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DJIA: 9949.36 -92.12
Nasdaq Composite: 2150.73 -12.74
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The US market rallied in early trading on Wednesday following better-than-expected results from Wells Fargo, US Bancorp and Morgan Stanley. But the release of a downgrade analyst report on Wells Fargo from a “Neutral” to “Sell” rating during the day led to a sell-off in the banking sector, which sent the rest of the market lower. The report also highlighted that losses due to bad loans seemed to be accelerating. Further rattling the banks are talks that the Obama administration will require the seven biggest bailout recipients to cut total pay package for their 25 highest paid employees by an average of 50%.

On the economic front, the Fed’s “beige book” reported signs of stabilizing or even improving in recent weeks. However, the job market conditions remained abysmal, with all 50 states reporting large jumps in unemployment rates in September, of which 15 of the states reported jobless rates of above 10%.

The major indices were pushed off from one-year highs with the Dow Jones Industrial Average losing 0.92% while S&P 500 fell 0.89% to end at 1081.40. Nasdaq composite lost 0.59%.

Wednesday brings results of major companies including 3M, AT&T, Merck, Travelers Cos., Amazon.com and American Express.

US light crude oil for December delivery rose US$2.25 to settle at US$81.37 a barrel, pushing towards a new one-year high, following the latest weekly government supply data reporting a smaller-than-expected rise in crude supplies.

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In Singapore today:

Asian markets slumped on profit taking as higher oil prices, which briefly hit US$80 a barrel on Tuesday, spooked inflation worries among traders. The weaker US stock futures further added to the downward pressure, which led the STI index to close 18.54 points down at 2692.55. For every stock that rose, 2.28 fell. Turnover was 1.49 bil shares with a value of S$1.27 bil traded.

It was a relatively quiet day for the Singapore bourse as traders took their cues from the overseas market. Penny caps were mostly lower, extending their losses from yesterday as traders reacted to the news that Singapore's largest stock broker had placed trading restrictions in the shares of Transcu. Trading in the shares of Transcu were halted today pending an announcement; which inadvertently lead of speculations of what the event may be, following the 20 per cent fall yesterday.

It was notable that trading in most penny caps was losing vigour with many traders getting doubtful and uneasy about the rally. `Previously we were hearing rumours on which companies would win a contract or do a placement. Now we are wondering which share would be next to be designated' a dealer said.

Shares of VDH Energy fell 2 cents at 28.0 cents, possibly due to selling from placees of the placement of 36mil new shares priced at 11 cents. New Listing Jason Marine did well, ending at 39 cents, above its 21 cents offering. Dealers attributed the rise to its low valuations, small float and a good chance of a `short squeeze'.

Expect a second-day of retracement on the Singapore market today following a weaker US market overnight ensuing from a downgrade “Sell” report on Wells Fargo, inflation worries and absence of fresh directions.
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Mid day October 22. Choppy trading day for Asian markets


It was a choppy trading day for Asian markets after the Dow Jones Industrials index slumped 1 per cent on some analysts' downgrades. Despite the weak US dollar (which had accompanied the US equity rally), the DJIA surrendered an early lead to close in the red. The influential Hang Seng Index's 1 per cent slump zapped away much of the positive mood the market had. The STI index eased 9.55 points at 2683.00 points. For every stock that rose, 2 fell. Turnover was 933mil shares with a value of $796mil traded.

New listing CJ Fertilizer made its debut at 38 cents but soon fizzled out and slumped to end the session at 32.5 cents. While above its 29 cents placement price, dealers were quick to note the sentiments was not there to sustain its positive vibes. Jason Marine extended gains, adding 1.5 cents at 40.5 cents on talks short sellers were being `squeezed'. Other stocks that rose were Jardine Matheson, IndoAgric, OCBC Bank, Wilmar, OCBC Bank, OKP, First Resource and Noble Group that added between 1.5 and 48 cents.

On the balance, shares of Jardine C&C, UOB, Keppel Corp, SIA, City Developments, UOL, StarHub, DBS, Haw Par and NSL that fell between 2 and 40 cents.

21 Oct 09 : Another Slow Dying Day in SGX. What are we waiting for ?

Pre-Market Open Commentary for 21 October 2009


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DJIA: 10041.48 -50.71
Nasdaq Composite: 2163.47 -12.85
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The US market was dragged down on Tuesday by disappointing results of DuPont and Coca-Cola, both of which reported higher earnings that topped analysts’ expectations but weaker revenue that missed forecast. A stronger greenback as well as weaker-than-expected housing market report further added to the downward pressure. Housing starts in September fell short of expectations of 610,000 unit annual rate, rising by only 590,000 unit annual rate, from 587,000 unit annual rate in August. Similarly, building permits, a measure of builder confidence, of 573,000 unit annualised rate in September came in below expectations of 595,000 unit annualized rate.

There was a broad base retreat with the Dow Jones Industrial Average losing 0.50% while S&P 500 fell 0.62% to end at 1091.06. Nasdaq composite lost 0.59%.

Wednesday brings reports on crude inventories, state-by-state government unemployment rates and the release of the Fed’s “beige book” report on the economy. On the same day, major corporate results due include those of Wells Fargo and eBay.

US light crude oil for November delivery fell US$0.52 to settle at US$79.09 a barrel, after ending the previous session at the highest level in a year.

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In Singapore today:

Despite a bright number at Apple, Europe’s flat open dampened the mood and the Hang Seng Index’s late session profit taking precipitated the same over in the Singapore bourse. The STI index clawed back its morning gains, ending marginally lower by 0.61 points to 2711.09. For every stock that rose, 1.57 fell. Turnover was 1.98 bil shares with a value of S$1.29 bil traded.

Situational issues dominated trading while the broader market stayed largely sideways as investors awaited results from the larger companies. Shares of Memstar jumped 2 cents at 12 cents when it was re-quoted at 11.45 this morning. The company said it has entered into `Heads of agreement with Shenyang Water Group Co. Ltd to form an entity to acquire water and wastewater treatment plants in Shenyang City, PRC'. It later settled 1.5 cents up at 11.5 cents. United Envirotech touched 44 cents before easing to end 2 cents down at 40.5 cents. Traders said there were rumours that company may soon announce a contract win.

Prices of penny caps reversed in the afternoon when rumours surfaced that a broker had imposed trading restrictions on a Transcu. The shares dropped 4 cents at 15.5 cents in heavy turnover. Indeed, UOB Kay Hian announced such curbs after the market closed. Shares of Novena (which holds a 13 per cent stake in United Envirotech) also gave back its gains to end half cent down at 19.5 cents.

Expect the Singapore market to retrace today taking cues from the weaker US market overnight following the release of a mix of results from major US corporate this week and the absence of fresh directions. The major trading themes revolving around the banking and property shares look lackluster and the technology sector has largely fallen off the radar screen of investors.

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NRA Mid Day October 21. Asian markets took cue from Wall Street.

Asian markets slumped on profit taking, taking its cue from Wall Street that fell after the release of some anaemic economic data. The STI index fell 12.60 points at 2698.49 points. For every share that rose, about 4 fell. Turnover was light on 736mil shares with a value of $545mil traded.

It was a relatively quiet day for the Singapore bourse as traders took their cues from the overseas market. Penny caps were mostly lower, extending their losses from yesterday as traders reacted to the news that Singapore's largest stock broker had placed trading restrictions in the shares of Transcu. Trading in the shares of Transcu were halted today pending an announcement; which inadvertently lead to speculations of what the event may be, following the 20 per cent fall yesterday. It was notable that trading in most penny caps was losing vigour with many traders getting doubtful and uneasy about the rally. `Previously we were hearing rumours on which companies would win a contract or do a placement. Now we are wondering which share would be next to be designated' a dealer said. Shares of VDH Energy fell 2.5 cents at 27.5 cents, possibly due to selling from placees of the placement of 36mil new shares priced at 11 cents. Also lower were shares of Novena, BioSensors, Sinotel and Ezra that eased between half and 1 cent.

New Listing Jason Marine did well today, ending at 35 cents, above its 21 cents offering. Others like Venture Corp, ST Engineering, Singapore Land, OUE, TPV, OCBC Bank, Trump Dragon, UOB and SunTec REIT rose between 2 and 10 cents.

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Market close Oct 21. Subdued undertone as STI drifts lower

Asian markets managed to claw back ea rlier losses to finish the day off their lows on light bargain hunting. It was a day of choppy trading with profit taking matched by intermittent bargain hunting. The STI index fell 18.54 points at 2,692.55 points. For every share that rose, about 2 fell; a marked improvement from the morning session. Turnover was 1.49bil shares with a value of $1.27bil traded.

It was a relatively quiet day for the Singapore bourse as traders took their cues from the overseas market. Penny caps were mostly lower, extending their losses from yesterday as traders reacted to the news that Singapore's largest stock broker had placed trading restrictions in the shares of Transcu. Trading in the shares of Transcu were halted today pending an announcement; which inadvertently lead of speculations of what the event may be, following the 20 per cent fall yesterday.

It was notable that trading in most penny caps was losing vigour with many traders getting doubtful and uneasy about the r ally. `Previously we were hearing rumours on which companies would win a contract or do a placement. Now we are wondering which share would be next to be designated' a dealer said.

Shares of VDH Energy fell 2 cents at 28 cents, possibly due to selling from placees of the placement of 36mil new shares priced at 11 cents. Others like Jardine C&C, SIA, Jardine Strategic, SIA, Creative Technology, SGX, Great Eastern and Starhub fell between 3 and 76 cents.

New Listing Jason Marine did well today, ending at 39 cents, well above its 21 cents offering. Dealers attributed the rise to its low valuations, small float and a good chance of a `short squeeze'. Shares of Ezra rose 10 cents at $2.09 when it announced at lunch its subsidiary EOC had clinched a US$1bil contract (spanning over 12 years) in Vietnam.

Others like Venture Corp, Yanlord, ST Engineering, Singapore Land, OUE, TPV, OCBC Bank, Trump Dragon, UOB and SunTec REIT rose between 2 and 14 cents.

Market Directions : The US Dollar

The Dollar Coin - Two sides of the Reserve Dollar

In all the anguish over the recent decline of the dollar two simple facts seem to have become misplaced.

One: a very large amount of the day to day positions in the currency markets and thus the negative movement in the dollar is the result of traders chasing profits. It is obvious but worthwhile to state again that these are trading markets and trading markets are all about trading profits. Currency markets are not designed, at least in their day to day valuation, to make judgments about the viability of a currency's reserve status.

Two: as soon as the Fed signals that its easy money policy is at an end a great percentage of those traders who are now avid dollar shorts will reverse and become with equal sincerity dollar longs. New punters who see profit potential in long dollar positions will soon join the ex-shorts as the Fed begins a rate cycle that might last two years and bring the Fed Funds rate back to historical norms. The dollar will follow the funds rate higher.

The world's disenchantment with the dollar as reserve currency is new. Only eight months ago the dollar was all the rage. The world fled to the dollar and dollar assets as global financial markets imploded. If another crisis struck tomorrow it is unlikely that the world seek financial refuge in a different national script and government? The current trading equation of risk and reward is a dollar based concept; as risk rises so does the value of the dollar. This logic remains true. If this aspect of the dollar's place in the world economic system has not really changed what then are the motivations and logic of the critics of the dollar's reserve status?

There are four different complaints about the dollar's reserve status. The first two are topical, that is they offer the critics a convenient way to advance their own political but not necessarily financial plans; and the second two are substantive. That is they raise issues that over time could and probably will diminish dollar's reserve role in the world economy.

1) The dollar offers substantial benefits to the US Government by allowing it to fund its deficits in its own currency. This provides the Federal Government with a fiscal support that gives its political agenda a much wider reach than if Washington had to depend solely on its own resources. For political adverrsaries curtailing the dollar's reserve role would limit American freedom of international action. A country that cannot pay for its endeavors must choose between its commitments. How long will China pay for the US Navy's Pacific Fleet to patrol the Taiwan Strait?

2) Dollar resentment is recent and it is much closer tied to the decline of the currency since March than any realistic change its reserve status. Where were the complainers when the dollar was rising from July to march?

3) US Federal deficits, real and projected, are a new and damaging entry in the reserve equation. How long will America's competitors continue to lend Washington money? The answer is straightforward-as long as it is in their interest to do so and no longer.

4) The creation of the Euro and its performance in this crisis has focused the minds of the world's money managers and bankers-there is an alternative to the dollar. Though the euro has drawbacks as a reserve currency, primarily its fragmented and limited bond markets, its efficiency as a medium of exchange and its ability to retain value as defended by the European Central Bank are real and strong.

None of this means that the dollar is not gradually weakening and that it may be replaced or at least supplemented as the world's reserve currency.

But we must be careful to differentiate between short term positioning in the currency markets that will likely be reversed by a change in Fed policy, and the long term and gradual trend down in the dollar as world reserve currency. Indeed the term itself is misnomer. There is no reserve currency created by a global bank and backed but its reserves. The dollar is the world's most common medium of exchange and store of value because it has evolved into that role. For most of the past half century the American economy dominated world finances and trade. The ascendancy of the dollar is a product of that position in the global economy. That dominance has been slipping for at least a generation, since the first Arab oil embargo, but over the past decade it has become increasingly obvious.

The question for currency traders is not will the Fed engineer a recovery in the dollar when it begins to increase interest rates and will that quiet doubts about the dollar's reserve role. The Fed can and the doubts will recede.

The question is how far will the dollar fall before this happens and will that fall have permanently damaged the world's faith in its reserve currency?

20 Oct 09 : Market Update

Pre-Market Open Commentary for 20 October 2009
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DJIA: 10092.19 +96.28
Nasdaq Composite: 2176.32 +19.52
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The US market recharges the rally with the Dow Jones Industrial Average reclaiming 10,000 on Monday as a weak greenback, higher commodity prices and some earnings optimism spurred on a market advance. After market close, Apple reported fourth-quarter results that came ahead of expectations with net income rising 47% YoY to a record US$1.7bil and YoY revenue growth of 25% to US$9.9 bil. Similarly, Texas Instruments also reported better-than-expected quarterly revenue and earnings although the results were weaker.

There was a broad base market recovery with the Dow Jones Industrial Average gaining 0.96% while S&P 500 rose 0.94% to end at 1097.91. Nasdaq composite increased 0.91%.

The market will continue to take cues from corporate results due this week. Tuesday will bring results of heavyweights including Caterpillar, Coca-Cola, DuPont, United Tech and Yahoo.

US light crude oil for November delivery continued to spike, gaining US$1.08 to settle at US$79.61 a barrel.


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In Singapore today:

Selling pressures on blue chips led the benchmark Straits Times Index falling as much as 26 points in early trading but the afternoon session turned out to be stronger, helped by firm US index futures and a positive start to the European bourses. The Hang Seng Index’s 1.2% gains also produced some precipitous follow through buying here. Bargain hunters were lured back in the market to buy local banks and property developers before the release of third quarter results. The STI index rose 3.57 points at 2711.70 points. Market breadth improved dramatically from its morning weakness to end in the positive. Turnover was 1.69bil shares with a value of $1.13bil traded.

In the broad market, trading was dominated by penny stocks and S-chips. Shares of YingLi rose 2.5 cents at 85.5 cents after reversing from its nadir at 81.5 cents. A local broker had issued a buy note with a target of $1.20. Sources said the company was on a roadshow with a foreign broker this week. Ramba added 1 cent at 73.5 cents amid rumblings that the company might be doing a private placement. Ziwo rose 3.5 cents at 39 cents after it released a good set of results while Novena rose 2.5 cents at 20 cents on talks that the company was in talks for either a placement or acquisitions. The company has a near 13 per cent stake in United Envirotech. Incidentally, United Envirotech rose 3 cents at 42.5 cents on rumours of a contract win.

Expect market sentiment to be cautiously optimistic today notwithstanding stronger corporate results from US on Monday, particularly from Apple. Recent announcement by the government to step up budget spending for 2010 to prop recovery, even after putting in place a S$20.5 bil stimulus package in 2009, reflects the cautionary stance of the government despite signs of the economy recovering.



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Mid day October 20. STI's advance nipped by early profit taking


Key US indices rose about 1 per cent across the board as traders put more money to work as confidence about earnings grow. Apple's better than expected results pushed its share price 6 per cent higher in after hours trading. Asian markets rose, helped by mainland China's 1 per cent lead. The STI index added 3.10 points at 2714.80 with its advance nipped by early profit taking. Market breadth was flat at best while still in the positive. Turnover was 1.094bil shares with a value of $644mil traded.

Situational issues dominated trading while the broader market stayed largely sideways as investors awaited results from the larger corporates here. Shares of Memstar jumped 2 cents at 12 cents when it was re-quoted at 1145 this morning. The company said it has entered into `Heads of agreement with Shenyang Water Group Co. Ltd to form an entity to acquire water and wastewater treatment plants in Shenyang City, PRC'. It later settled 1.5 cernts up at 11.5 cents. United Envirotech touched 44 cents before easing to end half cent up at 43 cents. Traders said there were rumours that company may soon announce a contract win. Rising in tandem was shares of Novena ( which holds a 13 per cent stake in United Envirotech) that rose half cent at 20.5 cents. Shares of Yingli rose 1 cent at 86.5 cents on talks that 2 brokers were `in contention to lead the company's private placement'.

Ending lower on profit taking were shares of Haw Par, Hyflux, SIA Engineering, SingTel, Wilmar, Ezion, China Environment, Shangrila Asia, FinancialOne and Straits Asia that eased between 1 and 40 cents.




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Market close Oct 20. STI closes flat

Profit taking capped the advance here in the afternoon. Europe's flat open despite a bright number at Apple dampened the mood and the Hang Seng Index's late session profit taking precipitated the same over here. The STI index gave up its morning gains to close 0.61 points down at 2,711.09 points. For every stock that rose, 1.5 fell. Turnover was 1.98bil shares with a value of $1.3bil traded.

Situational issues dominated trading while the broader market stayed largely sideways as investors awaited results from the larger companies. Shares of Memstar jumped 2 cents at 12 cents when it was re-quoted at 1145 this morning. The company said it has entered into `Heads of agreement with Shenyang Water Group Co. Ltd to form an entity to acquire water and wastewater treatment plants in Shenyang City, PRC'. It later settled 1.5 cents up at 11.5 cents.

United Envirotech touched 44 cents before easing to end 2 cents down at 40.5 cents. Traders said there were rumours that company may soon announce a contract win. Shares of Novena ( which holds a 13 per cent stake in United Envirotech) also gave back its gains to end half cent down at 19.5 cents.

Prices of penny caps reversed in the afternoon when rumours surfaced that a broker had imposed trading restrictions on Transcu. The shares dropped 4 cents at 15.5 cents in heavy turnover. UOB Kay Hian did announce such curbs after the market closed.

Shares of Yingli fell 1 cent at 84.5 cents despite talks that 2 brokers were `in contention to lead the company's private placement'.

Ending lower on profit taking were shares of Jardine Matheson, Jardine Strategic, Haw Par, Hyflux, SIA Engineering, SingTel, Wilmar, Ezion, China Environment, Shangrila Asia, FinancialOne and Straits Asia that eased between 1 and 42 cents.

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19 Oct 09 : No much movement in stock markets

Open Commentary for 19 October 2009
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DJIA: 9995.91 -67.03
Nasdaq Composite: 2156.8 -16.49
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Despite a brief euphoric rise for the Dow Jones Industrials above the 10,000 level last week, some sober earnings results led to some profit taking and consolidation on the last trading day of the week. Specifically, earnings from Bank of America, GE and IBM disappointed even though JP Morgan Chase came in ahead of expectations. For GE, the group was also cautious in its forward guidance, which was not what the market was looking to hear.

For the week, however, the major indices were still up. The Dow was higher by 1.3 per cent, the S&P 500 by 1.5 per cent and the Nasdaq Composite, a lower 0.8 per cent.

Expect sentiment this week to continue to be largely dominated by corporate results. Earnings announcements expected include that from Apple (today), American Express, Microsoft, Merck, Pfizer, 3M, Coca-Cola and Yahoo.

Another factor depressing interest was the weakened US dollar and continued strength in crude prices. Oil prices touched a new 52-week high partly due to cooler than expected weather in the Northeast USA. Crude for November delivery closed the week at US$78.53 per barrel – up US$6.76 or some 9.4 per cent for the week.

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In Singapore today:

A discernible lack of buying interest and the absence of fresh positive factors led Asian markets to drift Friday on consolidation as traders took stock of recent gains. But for the week, the STI index still gained a healthy 55.61 points or 2.1 per cent to 2708.12 points.

We think investor sentiment will be cautious at the start of the week though, given Wall Street’s weak close and continued uncertain climate. Trading volumes have also fallen a bit over the previous week given the discernible profit taking in blue chips and continued activity in the penny caps and some speculative.


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Mid Day October 19. Market looks a little tired

Asian markets were mostly lower, tracking the dour close on Wall Street Friday. `The market looks a little tired' a dealer said. While the V-shape recovery is taking shape, we should not expect a straight line to the upside. Singapore shares were modestly lower in lethargic trading. The STI index eased 5.65 points at 2702.47 points. For every stock that rose, 2 fell. Turnover was 778mil shares with a value of $512mil traded.

Shares of YingLi rose 1.5 cents at 84.5 cents after reversing from its nadir at 81.5 cents. A local broker had issued a buy note with a target of $1.20. Sources said the company was on a roadshow with a foreign broker this week. Ramba added 1.5 cents at 74 cents amid rumblings that the company might be doing a private placement. Ziwo rose 1 cents at 36.5 cents after it released a good set of results while Novena rose half cent at 18 cents on talks that the company was in talks for either a placement or acquisitions.

Stocks that fell included Jardine C&C, UOB, SGX, Venture Corp, Keppel Corp, SembCorp, Wilmar and Haw Par that eased between 2 and 54 cents.

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Market close Oct 19. Stocks recover at day's end

The afternoon session turned out to be stronger, h elped by firm US index futures and a positive start to the European bourses. The Hang Seng Index's 1.2 per cent gain also produced some precipitous follow through buying here. Renewed buying after lunch helped brighten up spirits and lured some sidelined money into action. The STI index rose 3.58 points at 2711.7 points. Market breadth improved dramatically from its morning weakness to end in the positive. Turnover was 1.69bil shares with a value of $1.13bil traded.

Shares of YingLi rose 2.5 cents at 85.5 cents after reversing from its nadir at 81.5 cents. A local broker had issued a buy note with a target of $1.20. Sources said the company was on a roadshow with a foreign broker this week. Ramba added 1 cents at 73.5 cents amid rumblings that the company might be doing a private placement.

Ziwo rose 3.5 cents at 39 cents after it released a good set of results while Novena rose 2.5 cents at 20 cents on talks that the company was in talks for either a placeme n t or acquisitions. The company has a near 13 per cent stake in United Envirotech. Incidentally, United Envirotech rose 3 cents at 42.5 cents on rumours of a contract win.

Stocks that fell included Jardine C&C, UOB, SGX, Venture Corp, Keppel Corp, SIA, SembCorp, Wilmar and Haw Par that eased between 2 and 46 cents.

16 Oct 09 : Market Cooling Down

Pre-Market Open Commentary for 16 October 2009
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DJIA: 10062.94 +47.08
Nasdaq Composite: 2173.29 +1.06
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The US market staged a late-session advance, to hit another one-year high on Thursday, as rising oil prices propped up energy shares, overshadowing sell-offs in the banking sector ensuing from Goldman Sachs and Citigroup results. The market shrugged off better-than-expected results from both financial heavyweights, although Goldman Sachs’ results exceeded both revenue and earnings expectations and Citigroup reported narrower losses than expected. Under the tech sector, both Google and IBM also reported results that exceeded revenue and earnings expectations.

There was however, some market support from upbeat economic readings. New claims for unemployment fell to 514,000 last week, better-than-expectations of 520,000 and down from 524,000 in the previous week and continuing claims fell to 5.992 mil in the last week from 6.067 mil in the previous week, providing hopeful signals to the US weak job market. Although the manufacturing conditions in the Philadelphia region dipped marginally more than expectations in October, the manufacturing conditions in New York improved sharply, with the Empire State Manufacturing Index rising to 34.57 in October (expectations was 17.25) from 18.88 in September.

The Dow Jones Industrial Average rose 0.47% while S&P 500 gained 0.42% to end at 1096.056. Nasdaq composite barely unchanged, edging up 0.05%.

Friday will bring the results of Bank of America and General Electric. On the economic front, the October consumer sentiment index and government readings on September industrial production and capacity utilization are due.

US light crude oil for November delivery spiked US$2.41 to settle at US$77.59 a barrel, after a government report showed a draw in fuel inventories.

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In Singapore today:

The Asian indices soared to fresh highs since their lows in March this year after the Dow Jones Industrial Index made a milestone recovery overnight. The STI index extended strong gains in the mornings but lost most of the gains as profit taking kicked in by afternoon and closed at a mere 3.67 points, or 0.14%, higher at 2712.15, a new 13-month high. For every stock that fell, 1.18 rose. Trading volume was a healthy 2.68 bil shares worth S$1.96 bil.

The STI index's break above the 2700 mark pushed more sidelined money into the market. “I'm beginning to believe in the recovery story and this should gain traction for the rest of the year” a trader mused.

Oil-rig builder were buoyed by the increase in crude oil prices. Sembcorp Marine jumped 12 cents or 3.51% to $3.51 while KepCorp extended gains into an eighth day, adding 2 cents to $8.35. Shares of UOB, gained 16 cents to $17.14, DBS also rose 16 cents to $13.34 while SIA gained 18 cents to $14.46. OCBC declined 8 cents to $7.60 after announcing it is acquiring the private banking arm of ING Bank.

There was also evidence of speculative trading in penning stocks. Yingli jumped 1.5 cents at 82.5 cents ahead of its corporate roadshow next week. Traders said rumours about a 95 cents placement surfaced again. Transcu Group continued its third-day surge and added 1 cent, or 5.71%, on news of a placement of new share at 9.6 cents per share.

Expect the Singapore market to consolidate today taking cues from the relatively flat close in the US market on Thursday and ahead of the weekend. An URA report on new private homes sales in September falling 36.6% to 1143, from 1804 units in August is also expected to dampen sentiment. Although there were 18 days in the Ghost month which fell within September this year and the impact of the government’s withdrawal of interest absorption scheme on September 14, to rein in property speculation, affected homes sales numbers, there were also signs of buyer resistance to the price hikes by developers over the past months.


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Friday 16 October 2009

Rising oil fuels Wall Street gains, Aussie climbs on rate hike bets

GLOBAL EQUITIES
Global equity markets will continue to feel the push and pull of earnings season as investors react to individual corporate results, said analysts.
Major US stock indices finished higher Thursday in choppy trading after rising oil prices lifted energy shares, offsetting declines in financial stocks as Q3 earnings at US banks Goldman Sachs and Citigroup disappointed some investors.
The energy sector was helped by data showing a decline in fuel inventories, which sent oil prices sharply higher. It appears the market is also reacting to the idea that the economic recovery is firming, said analysts.
In the financial sector, while Goldman Sachs Group and Citigroup's results exceeded forecasts, they failed to meet the lofty standard set on Wednesday by JPMorgan Chase, said market observers.
Goldman's earnings nearly quadrupled, largely because of strong trading results. Citigroup's third-quarter loss was narrower than expected, but the company booked $8 billion in credit losses.
Bank earnings are a particular focus for investors, as a healthy banking system is integral to a strong economy, and a strong indication of the magnitude of the market's recovery from the financial crisis.
On the economic front, data showed the Consumer Price Index prices edged up in September and the number of workers filing new claims for jobless benefits dropped to a nine-month low last week.
A sharp increase in New York state factory activity was tempered by a report showing factory activity in the Mid-Atlantic region grew less than expected.
At market close, the Dow Jones Industrial Average ended higher by 47.08 points, or 0.47%, at 10,062.94. The broad Standard & Poor's 500-stock index was up 4.54 points, or 0.42%, at 1,096.56. The tech-heavy Nasdaq Composite index added 1.06 points, or 0.05%, to 2,173.29.
Among emerging markets, Brazilian stocks gained for a fifth day, as oil surpassed $77 a barrel and China showed signs of accelerating economic growth. The Bovespa stock index rose 0.8% to 66,703.32 points.

GLOBAL BONDS
US Treasuries fell Thursday on generally positive economic data and as equities edged higher.
In late trade, the 10-year note was off 11/32 to 3.46%

COMMODITIES
NYMEX crude oil settled up $2.40 at $77.58 a barrel, after government data showed a sharp, unexpected drop in gasoline and distillate inventories.
Gasoline inventories fell by 5.2 million barrels in the week to October 9 against analyst expectations for an increase, according to the US Energy Information Administration, while distillate stockpiles also fell unexpectedly.
The EIA report showed demand for gasoline rising and total products rose against year-ago levels last week, but analysts said the main reason for the drop in product inventories was the steep decrease in refinery runs.
Comex gold futures, however, lost $14.10, or 1.3%, to $1,050.60 an ounce as some investors felt that the recent rally was overdone.

HONG KONG
Analysts said the benchmark index is likely to rise further in the near term on the improved outlook for the global economy.
The blue-chip Hang Seng Index rose 112.60 points, or 0.51%, to 21,999.08 Thursday, led by HSBC and Chinese banks, after Wall Street rose overnight on strong third-quarter results and improved September retail sales.
An associate director at a brokerage said that overall sentiment remained strong and that the Hang Seng Index could soon find its next resistance at 23,000 points.

SINGAPORE
The benchmark Straits Times Index closed up 0.1%, or 3.67 points, at 2,712.15 Thursday, giving up most of their initial gains on profit-taking toward the end of the session.
Commodity stocks saw firmer interest on hopes they will benefit from stronger crude oil prices.
Market watchers are divided on the index's future direction, with investors closely watching the latest corporate earnings in the US and Singapore.
Shares of local bank OCBC was down 1% despite news that it will acquire ING Groep's Asian private banking assets for US$1.46 billion. Sentiment may have been weighed down by concerns about the high price tag, and also by how well OCBC will be able to retain the former ING staff, according to Dow Jones Newswires.

CHINA
Analysts said they expect the benchmark Shanghai Composite index to gain further in the near term on signs of further improvements in the economy and corporate earnings.
The benchmark Shanghai Composite Index ended up 0.3% at 2,979.79 Thursday after stronger-than-expected bank lending data for September boosted demand for financial stocks.
China's central bank data showed financial institutions extended CNY516.7 billion worth of new yuan-denominated loans in September, up from CNY410.4 billion in August and significantly higher than economists' expectations of around CNY450 billion. The data raised hopes banks' profit margins may improve and more liquidity could flow into the stock market.
However, profit-taking and supply pressure from newly launched initial public offerings limited gains.
An analyst said that the main index could break out of its range, bolstered by the recent round of improved economic data, probably testing 3,500 points later this month.
Another analyst noted said the main board had come under some pressure from funds being diverted to the slew of initial public offerings of companies aiming to list on China's upcoming Growth Enterprise Market (GEM).

INDONESIA
Indonesian shares ended slightly higher as profit-taking limited gains. The main index rose 0.2% to 2,515.38 points.
Dealers said that sentiment on stocks stayed positive, in line with improving risk appetite.
They noted that investors booked profits on banks after the recent strong rally, but energy stocks remained in favour due to firmer oil prices.

TAIWAN
Taiwan shares ended up 0.2% in heavy volume at 7,710.40 points, boosted by technology and bank stocks.
A fund manager from Franklin Templeton First Taiwan Securities Investment Trust said that although US chipmaker Intel's earnings news provide fundamental support to Taiwan's technology sector, profit-taking emerged.
However, he added that he remains positive on the long-term trend for local stocks, which may rise gradually on strong liquidity momentum.

INDIA
The Sensitive Index fell 35.91 points, or 0.2%, to 17,195.20 Thursday due to a sell-off in technology stocks and weakness in select blue chips,
An investment adviser said that market players are cautious after a near-600 points rise in the past two sessions.
He also said that a setback in the markets is due in the near term but expects the Sensex to touch 21,000 levels in the next one year.

CURRENCIES
The US dollar was slightly lower against the euro Thursday after resurgent risk appetite quashed an early greenback rally and pushed the common currency back on its upward trajectory.
The euro, which typically also benefits from a recovery in risk appetite, was at $1.4920 by late Thursday afternoon in New York, from $1.4919 late Wednesday.
The US dollar hit a nearly three-week high against the yen before retracing slightly. A currency strategist who spoke to Dow Jones Newswires said the dollar's recovery came after it hit key technical levels in yesterday's trade.
Thursday afternoon in New York, the US dollar was at Y90.70 from Y89.44.
The Australian dollar rose to a 14- month high after Reserve Bank Governor Glenn Stevens said the central bank can't be "too timid" in raising interest rates, stoking speculation of further rate hikes next month.
The Aussie traded at $0.9209 at Friday morning in Sydney, after climbing to $0.9195 Thursday afternoon in New York. High oil prices also helped bolster the currency.
New Zealand's dollar jumped as a report showed third-quarter inflation accelerated faster than economists forecast. New Zealand's dollar was higher around $0.7423.
The Singapore dollar was higher in Asian trade late Thursday, boosted by improved risk appetite overnight after a strong showing from US stocks. USD/SGD was at 1.3862.
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Mid day October 16. Market pausing for a breather

Asian markets drifted on consolidation as traders took stock of recent gains. Dealers said there was apprehension that despite better than expected results at IBM and AMD, shares were lower in after hours trading. `I think the market is pausing for a breather' a dealer said. The STI index ratched 8.25 points lower at 2703.90 points after an initial high at 2724.44 points. For every stock that rose, 2 fell. Turnover was 808mil shares with a value of $566mil traded.

Nevermind oil topped US$78 a barrel, traders here appeared unfazed and happy to be sidelined. Shares of Ezion, Rotary, Keppel Corp, Falcon Energy and Semb Marine eased between half and 4 cents; instead of rallying. Ezra's better than expected results rose 4 cents at $2.01 and looked set to get fresh upgrades from analysts. Biosensors rose 3.5 cents at 64.5 cents with help from a foreign broker's buy report with a target of $1.06. Others like Jardine Matheson, OCBC Bank, Olam, ST Engineering, Jardine Strategic, Semb Corp and Goodpack rose between 2 and 24 cents.

On the balance, shares of Jardine C&C, SGX, SIA, SPH, DBS, Venture Corp and UOB fell between 2 and 64 cents.


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Market close October 16. Flat close to the week

A discernible lack of buying interest and the absen ce of fresh positive factors led Asian markets to drift today on consolidation as traders took stock of recent gains. The STI index edged 4.03 points lower at 2708.12 points after an initial high at 2724.44 points. For every stock that rose, 1.5 fell. Turnover was 1.64bil shares with a value of $1.2bil traded.

Shares of Ezion, Rotary, Keppel Corp, Falcon Energy and Semb Marine eased between half and 4 cents despite another increase in crude prices.

Ezra rose 5 cents at $2.02 and looked set to get fresh upgrades from analysts after announcing better than expected results.

Biosensors rose 7.5 cents at 68.5 cents with help from a foreign broker's buy report with a target of $1.06. Others like Jardine Matheson, Jardine Strategic, OCBC Bank, Olam, and Kep Corp rose between 5 and 28 cents.

On the balance, shares of SIA, SGX, APB and Bukit Sembawang, fell between 10 and 26 cents.


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15 Oct 09 : Dow Pass 10,000 mark

Pre-Market Open Commentary for 15 October 2009
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DJIA: 10015.86 +144.80
Nasdaq Composite: 2172.23 +32.34
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The positive start to the reporting season fuelled hopes that the third quarter could mark a turning point for corporate profits, leading to a rally on Wall Street overnight. The US market surged to end above 10,000 on Wednesday following upbeat profit reports from Intel and JP Morgan Chase. On Tuesday, Intel reported better-than-expected quarterly revenue and profits as well as issued bullish forecast for its 4QFY09 revenue and a pick-up in 4QFY09 gross margins. Similarly, JP Morgan reported higher-than-expected revenue and earnings on Wednesday.

The bullish corporate results stole the limelight. Although the economic readings for retail sales were weak, the readings were above market expectations, with September retail sales falling 1.5%, better-than-expectations of a 2.1% fall, from a rise of 2.7% in August, which arose partly from the “Cash for Clunkers” auto stimulus program. Excluding auto sales, September retail sales rose 0.5%, better-than-expectations of a rise of 0.2%, from a rise of 1.1% in August.

The Dow Jones Industrial Average rose 1.47% while S&P 500 gained 1.75% to end at 1092.02. Nasdaq composite rose 1.51%.

Thursday will bring a slew of corporate results from heavyweights, including Citigroup, Goldman Sachs, Nokia, Google and IBM.

US light crude oil for November delivery rose US$1.03 to settle at US$75.18 a barrel.

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In Singapore today:

The Singapore bourse surged to a 13-month high on Wednesday following the release of upbeat Chinese trade figures pointing to economic recovery and positive US equity futures. The STI index gained 40.08 points, or 1.5% to finish the day at 2708.48, crossing the 2700 level for the first time since September 2008. The bullish sentiment which led to strong investor interest was evident in the surge in trading volume. Turnover was 2.39 bil shares with a value of $1.88 bil traded, above the average daily volume of 2.05 bil shares valued at $1.64 bil for last week. For every share that fell, 4.18 rose.

Shares of UOB, DBS,City Development, CapitaLand, SGX, Keppel Land, Jardine C&C, OUE, Semb Marine and SIA rose between 12 cents and $1.00. Rotational interest amongst the penny caps; encouraged by the strong blue chips advance, closed mostly near their highs as traders believed there would be further gains ahead. `There is now vested interest in the Dow Jones Industrials index climbing above the 10k mark' and now that the STI index has closed above the 2700 level ` we expect it to climb towards 2800 in the days ahead' a dealer said.

Shares of Transcu rose 4 cents at 17.5 cents while Ezion burst above 80 cents to end 7.5 cents up at 82 cents on hopes of contract wins at the massive Gorgon gas field. Yanzijiang rose 7 cents at $1.04 while Falcon Energy rose 6.5 cents at 89 cents. Others like Cosmosteel, Ziwo, DMX Tech, C2O, Ramba and Hoe Leong rose between 1 and 7 cents.

Expect the Singapore market to advance higher today taking cues from the surge in US market on Wednesday and upbeat Chinese trade figures.

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Mid day October 15. STI extended gains

The Dow Jones Industrials Index's milestone recovery overnight ushered Asian indices to fresh highs since their lows of March this year. The STI index extended gains, adding 12.18 points at 2720.66 points. For every stock that fell, 2 rose. Turnover was 1.7bil shares with a value of $1.2bil traded.

The STI index's break above the 2700 mark pushed more sidelined money into the market. `I'm beginning to believe in the recovery story and this should gain traction for the rest of the year' a trader mused. Shares of UOB, DBS, Jardine C&C, SIA, SGX, Keppel Corp and Olam rose between 6 and 22 cents. OCBC bank was halted today pending an annoucement at noon. Sources said the bank was in talks to purchase the private banking arm of ING Bank. Financial one rose 3.5 cents at 56.5 cents on talks of privatisation while others suspect a placement was in the offing. Yingli jumped 3 cents at 84 cents ahead of its corporate roadshow next week. Traders said rumours about a 95 cents placement surfaced again.

On the balance, shares of China Environments, Petra Food, Fortune REITs, CapitaLand, Li Heng, OKP and Cosmosteel eased between 1 and 7 cents.


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Market close Oct 15. Flat close to trading day

The STI index gave up most of the morning's gains as the proverbial profit taking started in the afternoon and by closing bell, the benchmark STI closed up a mere 3.67 points at 2712.15 points. Market breadth also flattened towards the close as earlier gainers gave in to profit taking. Turnover was 2.67bil shares with a value of $1.96bil traded.

The STI index's break above the 2700 mark pushed more sidelined money into the market. `I'm beginning to believe in the recovery story and this should gain traction for the rest of the year' a trader mused.

Shares of UOB, gained 16 cents to $17.14, DBS also rose 16 cents to $13.34 while SIA gained 18 cents to $14.46.

OCBC declined 8 cents to $7.60 after the bank announced said they had purchased the private banking arm of ING Bank.

Yingli jumped 1.5 cents at 82.5 cents ahead of its corporate roadshow next week. Traders said rumours about a 95 cents placement surfaced again.

On the balance, shares of OUE, HK Land, Creative and Indo Agri declined between 4 and 9 cents.

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14 Oct 09 : Need for new leads to push market

Pre-Market Open Commentary for 14 October 2009
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DJIA: 9871.06 -14.74
Nasdaq Composite: 2139.89 +0.75
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The US market dipped on Tuesday as weakness in the financial sector and disappointing Johnson & Johnson results weighed down on Wall Street. The banking sector retreated after an analyst report downgraded Goldman Sachs to “neutral” from “buy”. Johnson & Johnson reported results with higher quarterly earnings that beat estimates due to cost cutting and one-off tax benefit but lower-than-expected quarterly revenue which disappointed investors.

The Dow Jones Industrial Average dipped 0.15% while S&P 500 shed 0.28% to end at 1073.19. Nasdaq composite barely changed, edging marginally up by 0.04%.

Wednesday will bring the results of JPMorgan Chase as well economic readings on September retail sales, August business inventories and September import and export prices.

US light crude oil for November delivery rose US$0.88 to settle at US$74.15 a barrel.

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In Singapore today:

The Singapore market ended its winning streak of five straight sessions, with the STI index dipping 12.07 points or 0.45% to close at 2668.40, due to weak opening for the European equities and US stock futures turning negative. Investors continued to sit on the sidelines, awaiting the upcoming earnings season to come through in full swing. There were similar numbers of gainers and losers. Turnover was 1.90 bil shares with a value of $1.34 bil traded.

Banking stocks all closed lower with UOB down 14 cents at $16.60, DBS down 2 cents to $12.98 and OCBC lost 3 cents to $7.65. Property shares eased slightly with CapitaLand shedding 6 cents to $3.93 and City Developments down 2 cents to $9.90. Other STI component stocks which closed weaker included Wilmar, down 5 cents at $6.40 and Singapore Exchange, dipped 1 cents at $8.49.

Expect the Singapore market to drift lower in the absence of fresh leads and as the market awaits the quarterly earnings season to come through in greater numbers.


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Mid day October 14. Most Asian bourses rose on Intel's good results
Eyes would be on Wall Street tonight as traders weigh on the results of bellwether Intel and J.P. Morgan. Intel's good results beat expectations and sent the index futures soaring. That advance fueled a rally in most Asian bourses. The STI index was more sub-dued, adding just 5.82 points at 2674.22 points. For every stock that fell, 2 rose. Turnover was light on 806mil shares with a value of $601mil traded.

Intel's good results would help stocks in Asian trading hours but focus will quickly turn to J.P. Morgan that reports before the open bell. `JPM would be the first big US financial to report and widely watched as a benchmark for the recovering US banking sector' a dealer said. Situational counters dominated trading on either talks of a strategic placement or contracts to be announced. Hoe Leong's recent placement to a strategic investor helped it extend its rally 2 cents higher to 49 cents. AsiaTravel rose 1.5 cents at 69 cents on rumours that it may soon announce contracts with the integrated resorts. Ramba rose 3.5 cents at 71 cents on talks that it may soon announce a private placement to funds. Ezion rose 3 cents at
77.5 cents on speculations that results for the contract tenders for the massive Gorgon ( natural gas) contracts may be announced soon.

Stocks that fell today included Great Eastern, Dtac, Ezra, OCBC Bank, Wing Tai, SATs Services, CNA and M1 that eased between 1 and 42 cents.


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13 Oct 09 : I wonder what happened if Q3 results are bad

Seemed like everything is based on that ?


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Pre-Market Open Commentary for 13 October 2009
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DJIA: 9885.80 +20.86
Nasdaq Composite: 2139.14 -0.14
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The US market inched closer to the 10,000 level on Monday carving out a fresh one-year high on earnings optimism but the market rally eased out late in the day as advances in banks and commodities competed with weaknesses in technology.

The Dow Jones Industrial Average rose 0.21% while S&P 500 gained 0.44% to end at 1076.19. Nasdaq composite barely changed, dipping 0.14%.

Tuesday will bring the results of Johnson & Johnson and Intel as well as the auction of US$30 bil 6-month notes and US$30 bil 3-month notes.

US light crude oil for November delivery rose US$1.50 to settle at US$73.27 a barrel.

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In Singapore today:

The Singapore market defied losses in most of the regional markets, advancing for the fifth straight day on optimism that the local economy will turn the corner sooner than expected. Yesterday, the Government lifted its 2009 GDP forecast for the economy to shrink by 2.0% to 2.5%, a sharp improvement from an earlier forecast of a contraction of 4% to 6%. The STI index was up 27.96 points at 2680.47 points at closing bell. For every stock that fell, 2.4 rose. Despite the upbeat sentiment, trading volume fell for the third consecutive day to the lowest level in three months, with 1.47 bil shares with a value of $1.1 bil traded, due to the absence of fresh leads. Also, traders were awaiting corporate results before deciding on portfolio changes.

`Friday's Wall Street surge was on light volumes and I won't be surprised it starts lower on profit taking' a dealer said.

Singapore's 3Q GDP grew 14.9 per cent quarter-on-quarter and heralded its first growth blip after 3 quarters of annual contraction. Economic-sensitive shares such as UOB, DBS, SGX, Great Eastern, SPH and OCBC Bank rose between 2 and 32 cents. Others like Jardine C&C, Venture Corp, Hyflux, Osim, Wilmar, Trump Dragon, Noble Group, SembMarine, Straits Asia and F&N rose between 2 and 84 cents.

Expect the Singapore market to be range bound in the absence of fresh leads and as the market awaits the quarterly earnings season starting this week.


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Mid day October 13. Upside capped by caution ahead of earnings
US markets pulled themselves higher on investor optimism over the current quarters' reporting season. There was little distractions in terms of newsflow but a dealer did note that it was the second lightest volume traded for the Dow Jones Industrials this year. The STI index rose 6.33 points at 2686.80 points with its upside capped by caution ahead of earnings reporting. For every stock that fell, 2 rose. Turnover was 1.1bil shares with a value of $703mil traded.

A dealer said he expected the market to be largely sideways after initial gains but saw downside supported by buying from asset allocation. In a sign that risk-taking was back, penny caps were making a comeback with strong moves and active volumes. Making good gains were shares of Ziwo, GuccoLeisure, China Taisan, Yingli, Seroja, BioSensors and China Environment that rose between 1 and 4.5 cents. Others like SIA, UOL, NOL, Parkway, SPH, Olam, Cosco Corp and Keppel Corp rose between 3 and 26 cents.

On the balance, shares of Jardine Matheson, Jardine C&C, Jardine Strategic, Superbowl, Venture Corp, UOB and Haw Par eased between 2 and 58 cents.



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Gold and The Dollar

Gold and The Dollar

The spectacular rise in gold, now hovering in record territory, has been fostered by three very different conceptions: gold as a trader's choice, gold as a theoretical proof and gold as a historical metaphor.

For the believers in metaphor the ascent of the metal is an augury for the decline of the west; for the theoreticians it is the only secure defense against inflation; for the traders it is a momentum purchase not to be missed. All three groups are buying gold and as yet, none have been proven wrong.

If we translate these speculations into currency terms the traders promise a long position with better returns than any other investment. The theoreticians predict a global currency system ravaged by government inflation and a revolving cast of devalued national scripts. And the third intimates the ultimate end of the dollar as the world reserve currency presumably replaced by the yuan. All three foresee a continued fall in the value of the dollar.

The economic logic of the three groups of gold supporters is currently aligned and all are profiting from the rise in prices. But it would be remarkable if three such disparate scenarios remained in tune for long.

The east may indeed replace the west as the dominant global economic center but it will not do so in time for the 'metaphorical Spenglerians' (so named for Oswald Spengler who published The Decline of the West in 1918) to take profit on their investment. Even if true the western decline will be slow and erratic and these position takers will miss their profit levels waiting for the final collapse.

For the theoreticians or monetarists, the second group of 'gold bugs', inflation will suddenly spring out of the ground like the product of so many governmental dragons' teeth. It is inevitable, increase the money supply and inflation follows.

However, with prices in decline in many industrial economies and unemployment at a new and much higher normal, it is hard to see firms extracting higher prices from consumers when cheaper international goods are so readily available. Whatever the theoretical prospect for inflation the current empirical evidence points the other way, toward deflation.

For the third group, the traders, theory and metaphor are irrelevent. The global financial system is under a soothing blanket of liquidity. The central bankers who have warmed the world with cash and who are now (we assume) very aware of the danger of prolonged cheap credit will (we assume), sooner or later, begin to draw back the protecting cover of liquidity. But the reabsorption of liquidity by the banks is wholly conditional on economic recovery. The most forthright of the world's central bankers, Ben Bernanke of the American Federal Reserve has stated this over and over; there is no reason to doubt his word.

The gold buyers in this group believe the Chairman. Until the central bank begins to tighten credit, excess cash and the pursuit of trading profit determines the price of gold. It does not matter that the bankers say they will tighten credit when the proper time comes, what matters is action. Until the banks actually begin to raise rates and subtract liquidity, for them, gold is a solid buy.

Of the three scenarios the first, the 'Spenglerian' is the most impervious to evidence. It exists apart from factual verification or to put it another way, it is always possible to find evidence that the west is declining. It is just a matter of choosing the right statistics. In practical and emotional terms this group will always be long gold, though it is in unsettled times like ours that they do the most buying.

For the monetarists results depend largely on logic and economic equations. If so much liquidity is loosed on financial markets it must over time (duration unspecified) produce inflation. It is a simple monetary equation, a rising pile of cash chasing a much more slowly rising pile of goods and assets. Over time inflation is the end product. But inflation is not solely the product of a balanced equation between cash and goods. Firms must be able to raise prices and consumers must be able to pay those higher prices and those last factors are now very much absent.

Yet economic stagnation and inflation are not mutually exclusive. If returning American economic growth is not sufficient to reduce unemployment what are the chances that the Fed will commence raising rates regardless of the price index? And if on the other side of the world East Asian economic growth takes off and forces commodity and goods prices higher those prices will shortly be felt in the United States. Irrespective of what the US economy is doing the world's markets can export inflation to the US.

What would prevent the price of oil from climbing as it did last summer if the Chinese, Indian and Brazilian economies accelerate and that third of the world creates its own economic cycle? Will the US be dragged by East Asia into robust recovery? Unknown. But the effect on the overextended American consumer and economy of $100 oil is not unfathomable. There is no certainty that one third of the world economy will be dynamic enough to force prices higher in the US. But if inflation comes in the US it will probably arrive from overseas and US domestic liquidity will have done little to create it.

For the Fed to raise rates and by default defend the dollar US economic growth will have to be robust enough to begin to take down the unemployment rate. This is an entirely unsure prospect.

US consumers are tapped there has been no sign in retails sales or consumer credit that the drivers of US growth have resumed their seats behind the wheel. The effect of a weak dollar on US exports may be pronounced. Shipments may increase enough to substantially reduce the trade deficit. But the US is not an export driven economy nor is its work force widely engaged in manufacturing. Exports may grow appreciably without it having any noticeable effect on American unemployment. Exports might look excellent to economists and free traders without US workers feeling any better or increasing their spending.

Of the three gold buying groups, the monetarists and the traders are most susceptible to Fed policy changes. But the traders are likely to act first. For them the earliest indication of a genuine change in Fed policy will be enough to abandon their long gold positions for profit. Monetarists are likely to wait until they are sure the Fed will act and then wait again until there is proof that the Fed has acted in time to prevent inflation.

And there we have the pernicious effect on the dollar. Until the Federal Reserve reestablishes the link between economic growth and interest rates the logic of the gold buyers is inescapable. Gold is not predicting a decline in the dollar or the inevitable advent of inflation but it is promising that without a vigilant Fed the first will continue and the second creep ever closer.