Singapore STI Market Review & Forecast for 30 Sept

    Singapore’s benchmark Straits Times Index opened on Tuesday morning at 2,754.35 points, down 1.35 per cent or 37.57 points as overnight US losses dragged down morning trading in Asia and ended 4.0 points or 0.14% lower to 2787.90. STI came off from its intra-day peak of 22790.60 and low of 2740.36.

Singapore stocks were down midday as commodity-related companies led a sell-off over concerns of weaker raw materials prices amid China's economic slowdown.

LOCAL BOURSE

Singapore's manufacturing sector continues to be a negative in the economy in third quarter of 2015.

Singapore's full-year 2015 GDP growth to 2.2% from 2014's 2.9%. It had earlier projected Singapore's 2015 GDP growth at 2.5%.

Singapore property auction market saw S$27.6 million of deals in the third quarter of the year, more than double the S$10 million seen in the second quarter though slightly below the S$31.7 million seen a year ago.

Singapore dollar (SGD) fell through S$1.43 on Tuesday, to a fresh six-year low, on increased concerns over global growth.

Market forecast:

STI is expected to consolidate. STI has broken the support level of 2757. STI has its resistance at 2800. If it breaks this level it might go up to 2830. Investor sentiments are cautious over the early rate hike of U.S. By FED and slowdown of china’s economy.

STI LEVELS
Support 1	2733
Support 2	2715
Support 3	2700
Resistance 1	2806
Resistance 2	2830
Resistance 3	2860

STI COUNTER SPECIFIC NEWS

• Croesus Retail Trust is acquiring Torius Property, a retail property located in Fukuoka, Japan, for a purchase consideration of JPY8 billion ($95.2 million), through debt and equity financing. The consideration represents a 3.7% discount to valuation of JPY8.3 billion.
• Huationg Global, the full-service integrated civil engineering solutions provider, it has secured new civil engineering contracts worth a total of $81.3 million.
• Rex International Holdings' subsidiary, Rex International Investments (RII) will subscribe to one million new Lime Petroleum Norway AS shares at a nominal value of NOK 100 per share for a total transfer price of NOK 100 million ($16.8 million).

GLOBAL FACTORS AND WORLD INDICES:

• Hong Kong stocks tumbled 3 per cent to a two-year low on Tuesday as growing fears of a sharp slowdown in the world economy sparked heavy selling, particularly in energy and commodity related shares. The benchmark Hang Seng index fell 3.0 per cent to 20,556.60 points, its lowest close since July, 2013.
• The Nikkei 225 at the Tokyo Stock Exchange dropped 714.27 points to 16,930.84 by the close, erasing all of its gains for the year. The index is down 18 per cent since authorities shocked world markets by devaluing China's yuan currency in mid-August.
• European shares fell for the second day in a row on Tuesday as weakness in the commodities sector hit markets, though battered miner Glencore halted its slide after a bruising sell-off on Monday. The pan-European FTSEurofirst 300 index and the euro zone's blue-chip Euro STOXX 50 index both fell 1.6 per cent.
• Malaysia's ringgit fell, headed for its biggest quarterly loss since 1997, as the relatively low level of import cover afforded by the nation's foreign-exchange reserves makes the currency more vulnerable to an emerging markets selloff.
• The Reserve Bank of India (RBI) lowered the benchmark repo rate - the level at which it lends to commercial banks - to 6.75 per cent, a larger cut than expected.
• China's foreign exchange regulator is stepping up its risk controls against corruption, it said in a statement released on Tuesday via the ruling Communist Party's anti-graft watchdog.
• Indonesia will announce later on Tuesday the second installment of a stimulus package aimed at supporting the rupiah and reviving growth in Southeast Asia's largest economy.
• Oil traded below US$45 as investors await data that may signal the strength of demand in the world's two biggest consumers. Futures in New York were little changed after falling 2.8 per cent Monday as China reported industrial-company profits declined 8.8 per cent in August.

STI - ENTERS IN BEAR TERRITORY

Primary trend of STI is confirmed to be Bearish as on 28^th September ‘15 STI broke its crucial support level of 2800 resulting in the total fall of around 730 points or 20% since mid of April. Technically, if the fall is more than 20% the market is said to be in bear phase. In the month of August market had seen the biggest fall since December 2008, with STI crashing around 420 points approx followed by fall of around 180 points in September,2015.

There are various factors which can be accounted for downfall of STI. To mention few:-

WEAK ECONOMIC DATA

Singapore hasn’t been performing well in past few months and weeks. Talking about the most recent event, air quality has degraded in Singapore due to haze from Indonesian forest fires which is driving the pollution gauge in parts of the country to hazardous levels and blanketing downtown Singapore with a layer of smog. This is having a negative impact on STI. The economic data from last 2 months is lower than expected. Here are the few highlights on the recent economic data of Singapore.

• Singapore's full-year 2015 GDP growth has been lowered to 2.2% from 2014's 2.9%.
• Manufacturing output declined by 7.0% in August 2015, on a year-on-year basis.
• Singapore's inflation fell 0.8% in August from a year earlier. Core inflation rate is estimated to be 0.5%-1.5%.
• Consumer confidence fell 0.9 point to 129.6 in September on heightened concerns about the economy in the next five years.
• Non-oil domestic exports declined 4.6% in Aug 2015, following a 0.7 per cent decline in the previous month, due to a contraction in both electronic and non-electronic NODX.
• Retail sales decreased 2.2% in July 2015 over the previous month.
• Import and Export Price Indices fell 2.5% and 1.2% respectively in July 2015 over June 2015 due mainly to lower oil prices.

Data source : http://www.singstat.gov.sg/

SLOWDOWN OF CHINA’S ECONOMY

China has sent ripples of shock waves across various markets throughout the world as China’s growth continues to slow down. Chinese shares have fallen about 38% since the peak in mid-June, despite the government’s efforts to support the indices by directly buying into the stock market a little short of two months ago.

Manufacturing slow down in China has impacted Singapore adversely. Also, there is a fear of a slowdown in Chinese growth and demand for raw materials, which if seen, will be another massive shock to the global economy.

STI has seen one of its major fall after China's central bank decided to devaluate their currency by dropping yuan to a four-year low. This led to fall in Singapore dollar to its 5-year low due to deprecation on Yuan.

FEAR OF U.S. RATE HIKE

With the various statements coming from Chairperson of FED, Janet Yellen, and FED officials, over the increased expectation of rate hike by end of 2015 has also created fear amongst the investors world wide. After seven years of a zero-interest-rate policy, the decision by Federal Reserve to increase U.S. Interest rate will lead to fall in Asian market as investors will start taking out their investment from Asian countries to invest in U.S. Market. The impact of this is felt on Singapore as the fear of rate hike is constantly dragging STI in red.

GLOBAL MELTDOWN

Talk about US, UK, European or Asian market, the global meltdown can be seen everywhere. Dow fell 469.68 points to 16,058.35, which is 12.3 percent below its record close of 18,312.39 set on May 19, 2015. Standard & Poor's 500 index slumped 58.33 points to 1,913.85. It's now down 10.2 percent from its high of 2,130.82 on May 21, 2015. Europe market also slashed down by around 16% since July. Talking about the Asian market, in last 2 months Shanghai and Nikkei has fallen by more than 20% , KLCI lost 8% and some other markets also showed the similar trends since then. Singapore in line with Asian and world market is suffering with the same sentiments.

 

STI has it’s support near 2700. Technically, STI is bearish as all indicators like RSI, MACD, CCI, etc are giving the indication of market to be bearish ahead. If STI breaks the level of 2700 it may come down to 2520. Investor sentiments are cautious over the early rate hike by FED and the slowdown of China’s economy.

Singapore Stock Market & News Highlights 29 Sept 2015

• Singapore benchmark Straits Times Index (STI) opened at 2,754.35 points, down 1.35 per cent or 37.57 points.
• Asian stocks fell to the lowest since 2012 on China concerns & Wall St drop.
• Asian futures are signalling more losses as markets roiled also bonds climb.
• Ezra Holdings disclosed that DNB Bank ASA, has bought a 7.04 per cent stake in it for S$24.84 million.
• Croesus Retail Trust will buy Torius Property, a suburban retail mall in Fukuoka, Japan, comprising 36 buildings, for about eight billion yen.
• Commodity giant Glencore, fell 29 per cent in London. 
• Noble Group shares fell by 15% on global commodity woes.
• Huationg has won new civil engineering contracts worth S$81.3m.
• Olam is planning to double African coffee estates.
• Singapore's completed condo prices have dropped by 0.6% in August.
• Ng Kok Siong of Singbridge will take over as CEO of Guangzhou Knowledge City
• Upward pressure on Singapore wages will be there in 2015 due to skills shortages for highly-skilled candidates and government policy to encourage the hiring of locals for middle-income jobs.
• There are mixed messages from Fed officials as they go public in force. However, Fed's Official Dudley said US is on track for 2015 interest-rate rise.
• Commodity traders faced higher costs under new European rules.
• China's bond market is 'overheating' after stocks.