STI Technical Analysis & Market Forecast for Singapore

  Singapore shares opened 0.5 per cent higher, with the STI up 13.82 points to 2,969.76 following a mixed session for US markets before the weekend. and ended 34.50 points or 1.17% lower to 2921.44. STI came off from its intra-day peak of 2921.44 and low of 2921.44.

Investors look to individual counters after days of mass selling followed by mass buying as volatility hit global markets. The result is a mixed morning trading session in Singapore. STI ended in red.

STI Day Performance

Open: 2987.18

High: 2987.18

Low: 2921.44

Close: 2921.44

Change(Points): -34.50

% Change: -1.17%

Volume: 1268.20 M

Rise: 155

Fall: 244

Unch: 396

LOCAL BOURSE

Bank lending in July rose from June, but by a smaller extent compared to a month ago, preliminary data from the Monetary Authority of Singapore (MAS) showed on Monday. This reflected weaker growth in business lending, given the big boost in construction loans in June.

Market forecast: STI is to take side ways trend. Its suport level is at 2904, if breaks this level it is expected to go up to level of 2800, it has its resistance at 3000. However, market sentiment still remains bearish due to expectation of increase in US interest rate by FED in september.

STI LEVELS
Support 1	2905
Support 2	2850
Support 3	2800
Resistance 1	3000
Resistance 2	3050
Resistance 3	3115

STI COUNTER SPECIFIC NEWS

• Raffles Medical Group’s, wholly owned subsidiary, Raffles SurgiCentre, has entered into a share purchase agreement with AEA International Holdings. This is for the acquisition of 375,112 shares, or about a 55% stake in International SOS (MC Holdings) (MCH).
• Grand Banks Yachts posted a $2.44 million net loss for 4Q ended June 30, compared with $801,000 in earnings a year earlier. Revenue increased 3.5 per cent to $13.68 million.
• Chasen Holdings, the specialist in relocation solutions, technical and engineering services and third-party logistics, says it recently secured contracts worth $44.5 million for FY15/16.

GLOBAL FACTORS AND WORLD INDICES:

• Chinese stocks sank again on Monday amid uncertainty over US interest rates, reviving fears of a broader global economic slowdown that has rocked the world's financial markets.
• Hong Kong stocks were almost flat on Monday, capping a volatile month in which major indexes registered their worst performance in nearly four years amid global market turmoil triggered by concerns over the Chinese economy. Hang Seng index rose 0.3 per cent, to 21,670.58, while the China Enterprises Index lost 0.1 per cent, to 9,741.41 points.
• European shares fell on Monday, with Germany's DAX and France's CAC on track for their worst month in four years, plagued by sliding Chinese stocks and the threat of a US rate increase as early as September.
• Australian shares fell one per cent on Monday, capping its worst monthly performance in seven years, amid confusion over central bank policy direction in the US and China. The index fell 8.6 per cent in August, its biggest monthly decline since late 2008.
• South Korea will consider increasing its imports of Iranian crude oil and condensate when sanctions on Tehran are lifted, a senior government official said on Monday.
• Dollar slipped in Asia on Monday on fears that China's economic malaise could drag on global growth, reversing a rally that had been fuelled by hopes for a September Federal Reserve rate hike.
• Iran expects to finalise the wording for a new model for international oil contracts in the next three weeks, the oil minister said on Monday, as Tehran seeks to boost recovery from its fields with the help of foreign companies.

STI MARKET REVIEW & Day Performance Trading Analysis

STI MARKET REVIEW:

Singapore share prices opened lower with the STI down 26.63 points or 0.92 per cent to 2859.66 and ended 13.29 points or 0.46% lower to 2873.00. STI came off from its intra-day peak of 2905.29 and low of 2847.17.

Singapore in early trade rebounded after gap down open moved in positive territory due to declartion of rate cut in China but it came down due to increase of selling pressure latter in the market and closed in red.

 STI Day Performance:

Open: 2859.66

High: 2905.29

Low: 2847.17

Close: 2873.00

Change(Points): -13.29

% Change: -0.46%

Volume: 2306.40 M

Rise: 201

Fall: 240

Unch: 353

LOCAL BOURSE

Singapore's industrial output marked 6th consecutive contraction by falling more than expected in July. Factory output fell by 6.1% y-on-y last month. Excluding the volatile biomedical sector, it contracted by 13.4%, output would have fallen by a smaller 4.1%.

Singapore dollar extended gains despite of weaker industrail ouput data of July, which came lower than expected,as shares on the Shanghai Composite index rallied 3.7%. It gained to 1.4000 versus the US dollar from around 1.4040, as shares on the Shanghai Composite index rallied 3.7%.

Market forecast:

STI is to takeside ways trend. It has its resistance at 2928, if it breaks this level it is expected to go up to level of 2947 and it has its support at 2800. However, market sentiment still remains bearish as they did not find China’s rate cut sufficient to control the global meltdown due to slowing growth of Chinese economy.

STI COUNTER SPECIFIC NEWS

• Eu Yan Sang, the retailer of Traditional Chinese Medicine, has suffered lossed in the 4th quater dur to challenging macro-economic environment in Hong Kong and Malaysia.
• Retail Real Estate Investment Trusts (REITs) have reported over the labour cruch and are set to grow again.
• Croesus Retail Trust (CRT), has announced dividends of 2.02 cents per unit for fourth quater 2015, which make toat of DPU to 8.08 which is 2.8% more from FY2014.

GLOBAL FACTORS AND WORLD INDICES:

• Asian stocks fell on Wednesday as investor sentimen remain negative as they find fresh rate cut still not enough to stabalise the slowdown of the Chinese economy or can help to stop the donwwanrd trend of the Chinese market. China's key share indexes saw lot of fluctuation in the market today. Indexes moved higher quite a times in the earlt tarde today but they came down due to the selling pressure in market. Investors are expecting more support from the central bank and the government.
• European shares fell on Wednesday, in line with decline in global market all over the world. Due to concerns over China’s economy. Also the stock of bank and mining stocks underperforming. Pan-European FTSEurofirst 300 index, fell by 2.6% inline with silimar amount of fall in the eurozone's blue-chip Euro STOXX 50 index followed by rise of 4.3 % in previous trading session.
• Shanghai stocks closed around 1.27% lower, trading was quite volatile on Wednesday, the fall was seen even though central bank interest declared a rate cut with the aim to boost boost the flagging economy and falling shares. China's benchmark Shanghai Composite Index closed after falling 37.68 points to 2,927.29 with turnover of 461.8 billion yuan. It surged up to 4.29 per cent and was down as much as 3.85 per cent during the day.
• Australian stocks, moved up after the declartion of rate cut by China. However buoyed by China's move to cut interest rates, staged a late rally to finish higher Wednesday after trading in the red for most of the session. The benchmark S&P/ASX200 index closed 0.69 per cent higher at 5,172.8 after falling as low as 5,051.40 in early trade.
• The dollar stood up strong against the yen and euro on Wednesday, as both the Chinese and European stock markets faced a losing ground despite China’s easing measures, where investors are still anxious about the global economic outlook.
• Crude oil futures traded positive on Wednesday after the sharp fall but still not far off 6-1/2 year low on the back of the negative Chinese market outlook which is the largest energy consumer.
• Gold slipped on Wednesday as equities bounced back after China eased monetary policy further to support a faltering economy and stock markets that had fuelled this week's global rout.
• Ringgit dropped to a 17-year low influenced by the degraded Malaysian economic outlook which is facing the dual effect of political scandal, oil price and equity market sell down.

SGX Singapore : STI Techhnical Analysis & Market Forecast

STI MARKET REVIEW : Singapore share prices opened lower with the STI down 32.97 points or 1.51 per cent to 2918 and ended 42.90 points or 1.51%higher to 2886.29. STI came off from its intra-day peak of 2926.76 and low of 2808.31.

Singapore rebounded after gap down open moved in positive territory. STI recovered after a fall of 127 points on previous trading session.

STI DAY Performance:-

Open: 2809.55

High: 2926.76

Low: 2808.31

Close: 2886.29

Change(Points): +42.90

% Change: +1.51%

Volume L: 2080.70 M

Rise: 306

Fall: 145

Unch: 347

LOCAL BOURSE

Singapore is in line to make public housing furtehr affordable before elections. This is putting more pressure on the developers from plunging sales and home prices.

Prime Minister Lee Hsien Loong is boosting grants for public housing, also raising the household monthly income ceiling to qualify for new units by $2,000 to $12,000 and to $14,000.

Singapore's core inflation, which excludes private road transport and accommodation costs, will remain soft for the rest of the year despite a more than expected rise in July.

Market forecast:

STI is to takeside ways trend. It has rebounded today near its support od 2800, if it breaks this level it is expected to go further down till 2765. Concern over US interest rate to be increased is relaxed for the time being as FED has delyaed its decision towards early 2016. However, market sentiment still remains bearish over the global meltdown due to slowing growth of Chinese economy.

STI COUNTER SPECIFIC NEWS

• Kingsmen Creatives Ltd has accepted an offer from JTC Corporation to acquire about 5,251 sq m of vacant leasehold land located at Changi Business Park for a cash consideration of S$7.07 million.
• Environmental services provider 800 Super Holdings reported its net profit for the year ended June 30 nearly doubled to S$17.56 million from S$8.97 million a year ago.
• Software solutions provider Silverlake Axis has reported rise of 1% in net profit for the fourth quarter ended June 30 from a year ago to RM74.7 million.
• Other income increased significantly from RM3.2 million in a year-ago period to RM24.3 million in the fourth quarter, which the group attributed to an accounting gain of RM19.2 million on dilution of interest in an associate in China, Global InfoTech Co Ltd, following its initial public offering in May.
• National carrier SIA has bought back their own 630,800 shares from the open market at S$9.68 to S$9.92 each on Monday, totalling upto of S$6.18 million.

GLOBAL FACTORS AND WORLD INDICES:

• Asian shares tumbled today after a big decline in Chinese stocks sparked a global equities rout and increased the fear over the future outlook of the world economy. Shanghai stocks tumbled 6.41 per cent at the open, in line with the decline of previous day.
• Hong Kong stocks fell 0.67 % in early trade Tuesday, in line with fall in all other gobal indexes. Hang Seng Index fall by 142.86 points to 21,108.71 in opening deals.
• China's major stock indexes further dropped by 6% in early trade on Tuesday, continuing the decline of Monday that made Chinese exchanges suffer and destablised the world financial market around the world. This was the biggest loss that China saw after the Global financial crises 2008.
• Australian shares rebounded on Tuesday as investor took the advantage of beaten down bank stocks, on the next day where the market has seen the biggest drop in over the 6 years. S&P/ASX 200 index rose 2.7 per cent i.e., 136.0 points, to 5,137.3, the rise covered more than half ofprvious days fall i.e., 4.1% drop.
• European stocks rebounded at opening on Tuesday despite of fall in Chinese indexes. Europe’s various indexes saw recovering the previous day fall, London's FTSE-100 rose by 1.3 per cent, Frankfurt rose by 1 1.74 per cent and Paris's CAC-40 opened the day up 1.7 per cent.
• US 10-year Treasury yields declined below 2 per cent. This was seen for the first time since April, as high sell-off in stocks and commodities encouraged investor to go for the safest fixed-income assets. US government securities increased consecutively on fourth day between the concern over slowing growth in China and destabilisng the economy all over the world and has also led to delay in increase in US ineterst rate by the Federal Reserve.
• Gold was traded below a 7 week high on Tuesday as equity markets regained from continous fall also US Dollar rebounded after a high sell-off during past few trading sesisons due to fear over meltdown of Chinese economy.
• Oil declined and was traded near 6 year low after equities market and commodities saw huge selloff.

YUAN DEVALUATION- Why and its Affects on Singapore

China devalued its tightly controlled currency, roiling global financial markets and driving expectations the yuan could be set for further falls.

China’s devaluation may be best seen as a distress signal from Beijing policymakers – in which case the world’s second-largest economy may be far weaker than the 7% a year growth that official figures suggests. China has been trying to engineer a shift from export-led growth to an expansion based on consumer spending – while simultaneously trying to deflate a property bubble.

WHY???

The central bank said it took action because

• Yuan has been rising in value when market forces indicated it should have fallen.
• Yuan has been pushed up because its exchange rate is heavily influenced by the US dollar, which has been strengthening on expectations of a hike in US interest rates.
• But the devaluation is widely seen as a move to bolster the economy which is struggling to achieve its 7 per cent growth target. This move will help exports to improve.
• Over the weekend, China reported that its exports plunged by an unexpectedly wide margin of 8.3 per cent in July. The currencies of other developing countries have also fallen, making Chinese exports relatively more expensive.

Leading to Currency wars.....

Currencies fell on fears a weaker yuan could threaten other economies in the region that compete with Chinese exports and encourage their central banks to devalue their currencies to stay competitive.

Ironically, while the much-talked-about devaluation of the renminbi has been a mere 2.8% so far, many currencies in Asia and emerging markets (EMs) have seen a far greater depreciation over the same period, as you can see from the chart.

Sierra Leone’s leone slumped 20%, the Kazakhstan tenge plunged 20.17%, while Malaysia’s ringgit, Russia’s rouble, Turkey’s lira and the Mexican peso all fell between 4% and 7%, as you can see from the chart. The Indian rupee, Taiwanese dollar and Vietnamese dong have all declined more than 3% since 7 August.

WIDER ECONOMIC IMPLICATIONS

• Depreciation of other Asina currencies - It could also result in a new Asian currency war. Yuan devaluation puts pressure on other central banks around the world to push down their own currencies to help their own exporters and to prevent destabilising capital flows.
• Delay in increase in US interest rate - It could delay a highly anticipated hike in US interest rates by the Federal Reserve. The yuan's devaluation has put even more upward pressure on the US dollar. Continued dollar strength is problematic for the Fed since it hurts exports and lowers inflation as well as weakens corporate profits.

Affects on Singapore

• Singapore’s economy shrank by 4% in Q2/2015 due to the SGD’s strength against most of our major export markets which is led by China, Malaysia, Hong Kong, Indonesia, Europe and US.
• In two days of devaluation, the People’s Bank of China wiped out the Singapore dollar’s relative weakness against the yuan that the MAS engineered for Q3/2015. However the MAS cannot simply follow the China’s move to regain that export edge.
• While a weaker SGD would stimulate our exports, it also means higher interest rates for homeowners when the U.S. Fed is poised to raise interest rates. The recent Chinese devaluation weakened the SGD and caused the 3-month SIBOR to spike 6.3% in one day.

China may further depriciate Yuan. Such prolonged uncertainties will affect business and consumer confidence, which will slow down consumption and economic activities. If these happen, the broader economy may be further hurt at a time when global outlook remains sluggish.

Singapore slashed the upper end of its previous 2 to 4 per cent annual growth forecast, amid ongoing risks from an uncertain external environment and a slowdown in global trade, and market watchers have cautioned of an equally cloudy outlook in the coming months.

An export-dependent country; a downward pressure on exports can be seen, the Purchasing Managers’ Index readings on new orders and new export orders, which, in turn, will have an impact on production and export figures.

If we take a look at the Singapore dollar nominal effective exchange rate, it has moved towards the bottom of the policy band, suggesting even more loosening of the monetary policy for the economy.

SGX Outlook: Weekly Technical Analysis for STI

WEEKLY WRAP OF STI

Straits Times Index (STI) opened at 3114.56 and ended -4.40 points or 4.40% lower to 2971.01 this week. STI came off from its weekly peak of 3116.36 and low of 2948.14. 

STRAIT TIMES WEEKLY WRAP
OPEN	3114.56
HIGH	3116.36
LOW	2948.14
CLOSE	2971.01
CHANGE (In Points)	-137.15
% CHANGE	-4.40

Banks, properties and oil and gas heavy weights hit at the moment which are dragging the index lower.

This week has’nt been good for the local stock market, with the Straits Times Index (STI) dropping five days. Volume has been thin in the market. For the week, the STI lost about four points.

Singapore Exchange is proposing the introduction of an Affiliate Segregation rule, whereby the collateral of an affiliate of an SGX Derivatives Clearing (SGX-DC) member is protected if the member defaults on its own contracts.

Support 1	Support 2	Support 3	Resistance 1	Resistance 2	Resistance 3
2948	2882	2794	3115	3215	3281

 LOCAL BOURSE

Local banks' loan growth is likely to subdued remain in coming quarters, though the lenders may benefiit from higher net interest margins with the imminent rise of interest rates, Fitch Group's BMI Research says in a report released on Friday.

Singapore is likely to remain stuck in the grip of deflation when the Consumer Price Index (CPI) for July is released next week.

Singapore-based online retailer RedMart has raised US$26.7 million ($37.5 million) in funding from investors, including Garena, Facebook co-founder Eduardo Saverin and SoftBank Ventures Korea.